12 Stocks That Are About to Explode

6. Grocery Outlet Holding Corp. (NASDAQ:GO)

Number of Hedge Fund Holders: 33

Analysts’ Upside Potential as of March 27: 10.16%

Grocery Outlet Holding Corp. (NASDAQ:GO) operates a network of discount grocery stores specializing in opportunistic purchasing and value-focused retailing. The company offers branded groceries, fresh produce, refrigerated and frozen foods, deli, dairy, general merchandise, and health and beauty care products at discounted prices, typically through sourcing surplus inventory, closeouts, and manufacturer overruns. GO operates primarily through independently owned and operated stores under a flexible franchise model, targeting value-oriented customers seeking savings on quality goods. It is among the stocks that are about to explode.

Grocery Outlet Holding Corp. (NASDAQ:GO) delivered solid Q4 results with comparable store sales increasing 2.9%, driven by 3% growth in comp count as customers responded to their assortment of “WOW!” items featuring deepest discounts. The company is implementing significant strategic changes, including appointing new leadership with Jason Potter as CEO and Chris Miller as CFO, while also reassessing their new store opening strategy. The company is tempering near-term unit growth expectations, planning to open 33-35 net new stores in 2025 instead of the previously planned 50+ stores, focusing on existing markets and high-priority adjacent markets to improve store performance and return on invested capital.

Grocery Outlet Holding Corp. (NASDAQ:GO) has made progress on systems transition work but still faces some challenges, particularly around inventory management tools for operators. On the supply chain front, the company has decided not to pursue multi-temperature distribution expansion and instead is simplifying its regional supply chain strategy, including opening a new 680,000-square-foot ambient distribution center in Vancouver. The company has implemented a workforce reduction as an initial step to reassessing its G&A cost structure and is exploring additional opportunities to scale G&A through automation and process improvements. While facing near-term challenges, management remains confident in the long-term potential of the business, citing vast white space with the potential to open over 4,000 stores across the United States.