Under $50, Is Tractor Supply Stock a Buy?

Major indexes have been battling volatility recently as investors digest a mix of geopolitical uncertainty and signs of macroeconomic weakness. When the market gets turbulent, it often pays to look for companies with resilient business models that can weather a storm.

One stock that stands out in this environment is Tractor Supply (NASDAQ: TSCO). Following a recent pullback that brought shares under $50 as of this writing, the rural lifestyle retailer looks like a good option for investors looking to beef up their portfolios with shares of a proven, durable company.

But Tractor Supply's growth story isn't perfect. Investors may have to endure some soft sales before the company returns to the steady growth it's known for.

Image source: Getty Images.

A mixed fourth quarter

To understand the recent pullback, investors need to look at Tractor Supply's fourth-quarter 2025 results. Unfortunately, they were disappointing.

Net sales for the period rose just 3.3% year over year to $3.9 billion. Comparable store sales, a critical metric for retailers, eked out a meager 0.3% gain -- a slowdown from the 0.6% increase in the year-ago quarter. Adding to the pressure, diluted earnings per share declined 2.7% year over year to $0.43.

The culprit? A cautious consumer holding back on big-ticket discretionary purchases, combined with a lack of emergency-response weather events that typically drive seasonal demand.

"Our fourth quarter results came in below our expectations and reflected a shift in consumer spending, with essential categories remaining resilient while discretionary demand moderated," explained Tractor Supply CEO Hal Lawton in the company's fourth-quarter earnings release.

But hiding beneath that headline weakness is the company's massive competitive advantage: its consumable, usable, and edible (C.U.E.) products.

Tractor Supply generates a significant portion of its sales from consumable, usable, and edible products -- things like livestock feed, pet food, and basic agricultural supplies. During the fourth quarter, this non-discretionary segment delivered low- to mid-single-digit comparable growth.

You can delay buying a new riding lawn mower, but you cannot delay feeding your animals. This structural reliance on C.U.E. items gives the retailer a more recurring revenue base that can help insulate base that insulates the business from the worst of consumer spending downturns.

Growth initiatives

While near-term discretionary demand is soft, investors shouldn't confuse a temporary macro headwind with a broken growth story.

Looking ahead to 2026, management guided for net sales growth of 4% to 6% and diluted earnings per share of $2.13 to $2.23. The company also plans to open about 100 Tractor Supply stores this year, suggesting that its expansion engine is still running smoothly.

Further, Tractor Supply's long-term roadmap remains firmly in place. At its late 2024 investor day, leadership unveiled its "Life Out Here 2030" strategy. The company expanded its total addressable market estimate to $225 billion and raised its long-term target for new store opportunities to 3,200 locations.

The financial targets attached to that roadmap are impressive. Management aims to grow annual net sales by 6% to 8% and comparable store sales by 3% to 5% over time. To get there, the company is leaning into new initiatives like its retail media network, expanded direct sales, and its rapidly growing pet prescription business, aided by its acquisition of Allivet.

Is the stock a buy?

So, with shares trading under $50 following the recent pullback -- down meaningfully from their 52-week high of nearly $64 -- is Tractor Supply stock a buy?

As of this writing, the stock trades at about 24 times earnings. A valuation like this isn't exactly a bargain-basement multiple. But it's not expensive either. At this price, investors are assuming that the company will successfully navigate the current discretionary spending slowdown and eventually reaccelerate growth to hit those long-term targets. If comparable-store sales remain flat for too long, a multiple like this leaves little room for error.

Still, given the company's aggressive store expansion plans and its highly defensive C.U.E. revenue stream, that premium is arguably justified.

Even better, Tractor Supply rewards its shareholders with a solid dividend yield of about 1.9% while they wait for the broader macro environment to improve.

Despite a soft patch in sales, I'd consider treating the recent sell-off as an opportunity. Tractor Supply remains a high-quality business, and buying the dip at these levels looks like a smart move for patient investors. Of course, there are risks, the biggest being that the company's expected acceleration never materializes. But I believe it will likely show up over time, even in a weak macroeconomic environment, thanks to the company's simultaneous implementation of multiple growth initiatives and the growth of C.U.E. sales.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tractor Supply. The Motley Fool recommends the following options: short April 2026 $55 calls on Tractor Supply. The Motley Fool has a disclosure policy.