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1. Company Snapshot

1.a. Company Description

CrossAmerica Partners LP engages in the wholesale distribution of motor fuels, operation of convenience stores, and ownership and leasing of real estate used in the retail distribution of motor fuels in the United States.It operates in two segments, Wholesale and Retail.The Wholesale segment engages in the wholesale distribution of motor fuels to lessee dealers, independent dealers, commission agents, and company operated retail sites.


The Retail segment is involved in the sale of convenience merchandise items; and retail sale of motor fuels at company operated retail sites and retail sites operated by commission agents.As of December 31, 2021, the company distributed motor fuel on a wholesale basis to approximately 1,750 sites located in 34 states; and owned or leased approximately 1,150 sites.CrossAmerica GP LLC operates as the general partner of the company.


The company was formerly known as Lehigh Gas Partners LP and changed its name to CrossAmerica Partners LP in October 2014.The company was founded in 1992 and is based in Allentown, Pennsylvania.

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1.b. Last Insights on CAPL

CrossAmerica Partners LP's recent performance was driven by strong Q4 2024 earnings, with the company reporting a 3.1% increase in gross profit and a 4.5% increase in distributable cash flow. The company's CEO, Charles Nifong, attributed the success to the partnership's ability to "continue to grow our fuels marketing business" and "expand our convenience store business." Additionally, the company's recent Form 10-K filing with the SEC provided a comprehensive overview of its 2024 financial performance, highlighting its growth and stability. This positive news, combined with its strong financials, has made CrossAmerica Partners a solid choice for investors.

1.c. Company Highlights

2. CrossAmerica Partners' Q3 2025 Earnings: A Mixed Bag

CrossAmerica Partners reported a net income of $13.6 million, up from $10.7 million in the third quarter of 2024, with earnings per share (EPS) coming in at $0.15, beating analyst estimates of $0.07. Adjusted EBITDA was $41.3 million, down 6% year-over-year. The Retail segment gross profit decreased 4% to $80 million, primarily due to a decline in motor fuel gross profit from lower retail fuel margins. The retail fuel margin per gallon decreased 5% year-over-year to $0.384.

Publication Date: Nov -17

📋 Highlights
  • Retail Segment Gross Profit Decline:: Dropped 4% to $80 million, driven by 5% lower retail fuel margin per gallon ($0.384) and 4% same-store fuel volume decline.
  • Merchandise Gross Profit Growth:: Increased 5% to $32 million, with merchandise gross margin rising 100 basis points, offsetting retail fuel margin weakness.
  • Wholesale Segment Gross Profit Drop:: Fell 10% to $24.8 million, reflecting 7% lower fuel gross profit ($15.7 million) and 5% volume decline to 177.7 million gallons.
  • Debt Reduction and Leverage Improvement:: Asset sales reduced credit facility balance by $21.5 million in Q3 and $62 million year-to-date, lowering leverage ratio to 3.56x from 4.36x.
  • Interest Expense Savings:: Cash interest expense decreased 17.5% year-over-year to $11.3 million, aided by lower rates and 55% fixed-rate swaps (avg. 3.4%).

Segment Performance

The Wholesale segment gross profit declined 10% to $24.8 million, primarily due to a decline in fuel volume, fuel margin, and rental income. Wholesale motor fuel gross profit decreased 7% to $15.7 million, with a 2% decrease in fuel margin per gallon. Inside sales increased 3% on a same-store basis, driven by strong performance in packaged beverages and other tobacco products. Merchandise gross profit increased 5% to $32 million, with a 100-basis-point increase in merchandise gross margin percentage.

Operational Efficiencies and Debt Reduction

Operating expenses decreased $4 million, or 6%, year-over-year, driven by reduced site counts and efficiencies in maintenance operations. The partnership realized $22 million in proceeds from asset sales during the quarter, using the funds to pay down debt. Year-to-date, the partnership has realized approximately $100 million in proceeds from asset sales, resulting in a decrease in the credit facility balance by $62 million and a reduction in the credit facility-defined leverage ratio to 3.56x from 4.36x as of December 31, 2024.

Valuation and Outlook

With a P/E Ratio of 18.08 and an EV/EBITDA of 12.21, the stock appears to be reasonably valued. The Dividend Yield stands at 9.93%, making it an attractive option for income-seeking investors. However, analysts estimate next year's revenue growth to be -13.8%, which may put pressure on the stock's performance. As one analyst noted, the partnership's focus on enhancing food offerings and fuel brand refreshes is expected to contribute to merchandise sales and margin results.

Conclusion on Financial Health

The partnership's effective interest rate on the total capital credit facility at the end of the third quarter is 5.8%. The cash interest expense decreased from $13.7 million in Q3 2024 to $11.3 million in Q3 2025, aided by a lower average interest rate environment and the existing interest rate swap portfolio. The Net Debt / EBITDA ratio stands at 6.18, indicating a relatively high level of debt. However, the partnership's efforts to reduce debt through asset sales are a positive step towards improving its financial health.

3. NewsRoom

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CrossAmerica Partners LP: A Deleveraging, High Yield Story

Nov -19

Source: seekingalpha.com

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CrossAmerica Partners LP Common Units (CAPL) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

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CrossAmerica Partners LP Reports Third Quarter 2025 Results

Nov -05

Source: globenewswire.com

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CrossAmerica Partners LP Maintains Quarterly Distribution

Oct -22

Source: globenewswire.com

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CrossAmerica Partners to Announce Third Quarter 2025 Earnings Results on November 5

Oct -17

Source: globenewswire.com

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CrossAmerica Partners: 10% Yield On Fuel Distribution And C-Stores

Sep -14

Source: seekingalpha.com

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CrossAmerica Partners LP Common Units (CAPL) Q2 2025 Earnings Call Transcript

Aug -08

Source: seekingalpha.com

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3 Dividend Stocks With Over 8% Yield To Buy In August

Aug -07

Source: 247wallst.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.83%)

6. Segments

Wholesale

Expected Growth: 4.83%

CrossAmerica Partners LP's 4.83% wholesale growth is driven by increasing demand for convenience and fuel, strategic acquisitions, and expanded partnerships with major oil companies. Additionally, the company's focus on cost savings initiatives, pricing optimization, and supply chain efficiencies have contributed to its growth momentum.

Retail

Expected Growth: 4.83%

CrossAmerica Partners LP's Retail segment growth of 4.83% is driven by increasing demand for convenience stores, strategic acquisitions, and expansion of food and beverage offerings. Additionally, the company's focus on enhancing customer experience through digital transformation and loyalty programs contributes to the growth. Furthermore, the rise of e-commerce and delivery services also boosts sales.

7. Detailed Products

Fuel Distribution

CrossAmerica Partners LP distributes fuel to a network of convenience stores, commission agents, and fuel dealers.

Convenience Store Operations

The company operates a chain of convenience stores, offering a range of products and services to customers.

Wholesale Fuel

CrossAmerica Partners LP supplies fuel to wholesale customers, including large commercial fleets and municipalities.

Retail Merchandise

The company offers a range of retail merchandise, including food, beverages, and other convenience items.

Card Services

CrossAmerica Partners LP offers card services, including fleet cards and commercial cards, to its customers.

8. CrossAmerica Partners LP's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for CrossAmerica Partners LP is medium due to the availability of alternative energy sources and transportation methods.

Bargaining Power Of Customers

The bargaining power of customers for CrossAmerica Partners LP is low due to the company's strong brand recognition and limited alternatives for customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for CrossAmerica Partners LP is medium due to the company's dependence on a few large suppliers and the availability of alternative suppliers.

Threat Of New Entrants

The threat of new entrants for CrossAmerica Partners LP is low due to the high barriers to entry in the industry, including regulatory hurdles and significant capital requirements.

Intensity Of Rivalry

The intensity of rivalry for CrossAmerica Partners LP is high due to the competitive nature of the industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 99.67%
Debt Cost 5.09%
Equity Weight 0.33%
Equity Cost 11.42%
WACC 5.11%
Leverage 30278.45%

11. Quality Control: CrossAmerica Partners LP passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Star

A-Score: 7.3/10

Value: 8.4

Growth: 5.8

Quality: 5.2

Yield: 10.0

Momentum: 5.5

Volatility: 9.0

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Natural Resource Partners

A-Score: 6.8/10

Value: 4.2

Growth: 5.6

Quality: 7.7

Yield: 9.0

Momentum: 6.5

Volatility: 8.0

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CrossAmerica Partners

A-Score: 6.3/10

Value: 7.2

Growth: 4.7

Quality: 3.5

Yield: 10.0

Momentum: 3.5

Volatility: 9.0

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World Kinect

A-Score: 5.7/10

Value: 9.6

Growth: 4.7

Quality: 3.7

Yield: 5.0

Momentum: 3.0

Volatility: 8.0

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Delek US Holdings

A-Score: 5.3/10

Value: 8.0

Growth: 2.0

Quality: 3.2

Yield: 6.0

Momentum: 9.5

Volatility: 3.0

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Par Pacific

A-Score: 4.4/10

Value: 5.8

Growth: 5.4

Quality: 2.1

Yield: 0.0

Momentum: 9.5

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

20.5$

Current Price

20.5$

Potential

-0.00%

Expected Cash-Flows