Why Casey's General Stores Stock Skyrocketed This Week

Shares of Midwestern pizza and convenience store chain Casey's General Stores (NASDAQ: CASY) were 13% higher this week as of 12:30 p.m. ET Thursday, according to data provided by S&P Global Market Intelligence.

Reporting fourth-quarter earnings, Casey's delivered earnings before interest, taxes, depreciation, and amortization (EBITDA) and earnings per share growth of 20% and 12%, surpassing analysts' expectations.

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This booming profitability, paired with management's announcement of a 14% dividend increase, sent Casey's shares skyward.

Casey's keeps soaring

Casey's General Stores operates approximately 2,900 locations, primarily located in small towns across the Midwest. As it expanded beyond its roots in Iowa to its current footprint of 20 states, the company has become a 258-bagger since 1990.

Despite this incredible run, I recently wrote that Casey's is still an excellent long-term buy -- despite nearing all-time highs. And again, I'd argue it still looks pretty promising even after this week's run-up.

Image source: Getty Images.

Growing its store count by 9% in 2025, management's expansion plans show no signs of slowing. Powered by its mergers and acquisitions team, Casey's has been expanding into new states, like Texas, Tennessee, and Florida.

The reason this M&A model works so well is that Casey's typically focuses on buying convenience stores without a strong food presence. Then it adds a Casey's kitchen, bringing in its beloved pizza-making and prepared food capabilities to these new locations, boosting profitability and generating a strong return on its investment.

However, even with its recent success, the company's valuation remains reasonable at 17 times cash from operations (CFO). For example, whereas Casey's has grown its net income by 19% annually over the last decade, Domino's Pizza has only grown its profits by 14% over the same time, yet trades at 23 times CFO.

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Josh Kohn-Lindquist has positions in Casey's General Stores. The Motley Fool has positions in and recommends Domino's Pizza. The Motley Fool recommends Casey's General Stores. The Motley Fool has a disclosure policy.