Casey's shares down 30% from June high as valuation normalizes

Casey's General Stores shares have fallen 30% from their all-time high set in June, marking the company's largest pullback since the Great Recession. The decline has brought the stock's valuation back to what investors describe as a more reasonable level after a summer of elevated pricing. While Wall Street focuses on short-term valuation concerns, the long-term investment thesis for the convenience store chain remains intact, leading some investors to view the dip as an opportunity to add to positions.

The stock's recent performance has been weighed down by a ballooning valuation that had stretched well beyond typical levels. Earlier this year, Casey's traded at nearly 50 times earnings, a multiple considered a stretch for a steady growth stock. As of October 16, 2026, the company is trading at 31 times earnings, a level that appears more aligned with its growth potential. This normalization follows a rough few months for the stock, driven by a variety of operational and market factors.

Casey's operates as the third-largest convenience store chain and the fifth-largest pizza maker in the United States by kitchen count. The company plans to add at least 120 new stores this fiscal year to its existing base of 2,959 locations. This expansion continues a long-term strategy of growing its store count by 4% annually, with management planning to add more than 400 stores through 2029. The company has grown from 1,978 stores in 2017, aided by a strategy of smart acquisitions.

Acquisitions play a central role in Casey's growth model, particularly in markets where small operators hold roughly two-thirds of U.S. convenience store locations. The company has demonstrated success in improving sales at newly acquired sites by introducing its food and beverage operations. For example, after acquiring CEFCO Convenience Stores in November 2024, food-and-beverage sales at those locations rose by 30%. By acquiring sites with limited or no prepared food operations, Casey's generates significant returns on investment by applying its branding and operational expertise.

This expansion strategy is supported by 25 consecutive years of positive same-store sales growth. Casey's stores often serve as central locations in small Midwestern towns, making them difficult to disrupt. The company aims to replicate this playbook in underserved markets within reach of its current distribution centers. Despite the operational strengths, the stock currently appears to be falling rapidly, prompting caution among some investors.

While bullish on Casey's over the next decade, investors are advised not to rush into large positions immediately. A phased approach, adding to positions in two or three tranches through the end of 2026, is suggested as a way to manage risk. Alternatively, investors may wait for sustained signs of upward momentum in the stock price and reaccelerating same-store sales growth before making further purchases.