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Freshpet (FRPT)
NASDAQ:FRPT
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Freshpet (FRPT) AI Stock Analysis

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Freshpet

(NASDAQ:FRPT)

Rating:61Neutral
Price Target:
$76.00
▲(9.53%Upside)
Freshpet's strong revenue growth and strategic adaptations in targeting higher-income consumers are positive long-term indicators. However, the high valuation, weak technical indicators, and reduced sales guidance due to economic uncertainties pose significant risks. The company needs to improve profitability and cash flow management to enhance its investment appeal.
Positive Factors
Consumer Demand
Retail consumption for Freshpet grew about 14%, indicating strong consumer demand.
Revenue Performance
Freshpet's revenue of $263M exceeded expectations, with significant year-over-year growth in volume and price/mix.
Negative Factors
Customer Acquisition
Freshpet faced challenges in acquiring new households and slowed new dog additions, impacting revenue growth projections.
Growth Challenges
Growth building blocks have deteriorated, with FRPT displaying softer trends in purchase frequency, repeat rates, and velocity - all of which are now down year over year.

Freshpet (FRPT) vs. SPDR S&P 500 ETF (SPY)

Freshpet Business Overview & Revenue Model

Company DescriptionFreshpet, Inc. manufactures and markets natural fresh meals and treats for dogs and cats in the United States, Canada, and Europe. The company sells its products under the Freshpet brand; and Dognation and Dog Joy labels through various classes of retail, including grocery, mass, club, pet specialty, and natural, as well as online. Freshpet, Inc. was incorporated in 2004 and is headquartered in Secaucus, New Jersey.
How the Company Makes MoneyFreshpet primarily generates revenue through the sale of its fresh pet food products. The company's key revenue streams include sales to retail partners, such as grocery chains, pet specialty stores, and mass merchants, where consumers can purchase Freshpet products in the refrigerated pet food sections. Additionally, Freshpet has expanded its distribution through e-commerce channels, allowing for direct sales to customers. A significant factor contributing to Freshpet's earnings is its strategic partnerships with major retail chains, which enhance its market reach and brand visibility. The company's focus on high-quality, fresh ingredients and its commitment to pet health resonate with consumers, driving demand and sales growth.

Freshpet Earnings Call Summary

Earnings Call Date:May 05, 2025
(Q1-2025)
|
% Change Since: -9.13%|
Next Earnings Date:Aug 04, 2025
Earnings Call Sentiment Neutral
Freshpet has shown robust growth in e-commerce and operational efficiency, but faces challenges due to economic uncertainty impacting consumer behavior and resulting in revised sales guidance. The company is adapting with new distribution strategies and targeted marketing to mitigate these issues.
Q1-2025 Updates
Positive Updates
Strong E-commerce Growth
Freshpet's total e-commerce business was up 43% in the quarter, driven by higher-income consumers, particularly those who buy online and via subscription.
Operational Efficiency Improvements
Plants are running exceptionally well with Ennis making tremendous progress on gaining operating efficiencies, which is contributing to better margins and reduced logistics costs.
New Distribution Channels
Freshpet is now in its first Sam's Club store with encouraging early results. Expansion into more value-oriented stores is planned to reach more consumers.
Adjusted Gross Margin Improvement
Adjusted gross margin in the first quarter was 45.7% compared to 45.3% in the prior-year period, driven by lower input costs and reduced quality costs.
Record Household Penetration
Household penetration as of March 30th was 14.1 million households, up 13% year-over-year, demonstrating strong brand growth.
Negative Updates
Reduced Sales Guidance
Net sales guidance for 2025 was revised down to $1.12 billion to $1.15 billion, reflecting approximately 15% to 18% growth year-over-year, down from previous guidance of $1.18 billion to $1.21 billion.
Macro-Economic Challenges Impacting Growth
Freshpet's growth has been impacted by significant economic uncertainty, causing a slowdown in sales growth, particularly among consumers who are economically insecure.
Increased Customer Acquisition Costs
The cost to acquire new households has remained elevated due to the challenging economic environment, impacting marketing efficiency.
Pet Specialty Channel Challenges
The change in pet specialty distributor impacted net sales growth by approximately one point, causing temporary out-of-stocks in the channel.
Company Guidance
During Freshpet's first-quarter 2025 earnings call, the company updated its guidance to reflect current economic conditions impacting consumer behavior. Freshpet now anticipates net sales for 2025 to be between $1.12 billion and $1.15 billion, representing a year-over-year growth of approximately 15% to 18%. Adjusted EBITDA is projected in the range of $190 million to $210 million, while capital expenditures are expected to be around $225 million. The company focused on targeting higher-income consumers through increased advertising investments and introduced a new lower-price-point product under the Freshpet Complete Nutrition label. Freshpet also expanded its distribution to value-oriented stores, with promising initial results from its first Sam's Club store. Despite the challenging economic environment, Freshpet remains committed to becoming free cash flow positive by 2026 and maintaining its long-term growth strategy.

Freshpet Financial Statement Overview

Summary
Freshpet exhibits strong revenue growth and a solid equity position, which are encouraging. However, the company faces challenges with profitability margins and free cash flow generation. While the balance sheet remains robust, improving profitability and cash flow efficiency will be crucial for future growth.
Income Statement
75
Positive
Freshpet has shown strong revenue growth, with a TTM revenue of $1.01 billion, up from $975 million in the previous year. The gross profit margin stands at 40.1%, reflecting efficient cost management. However, the net profit margin is relatively low at 1.5%, and the EBIT margin is also modest at 1.8%. Despite these lower margins, revenue growth is a positive sign for the company.
Balance Sheet
70
Positive
The company maintains a healthy equity ratio of 67.3%, indicating a strong capital structure with significant equity funding. The debt-to-equity ratio is 0.41, suggesting manageable debt levels. However, a declining return on equity, currently at 1.5%, points to challenges in generating returns for shareholders.
Cash Flow
65
Positive
Freshpet's operating cash flow to net income ratio is favorable at 9.8, indicating strong cash generation relative to net income. However, free cash flow growth is a concern, with a TTM free cash flow of $13.07 million, an improvement from a loss, but still relatively low. The free cash flow to net income ratio stands at 0.83, showcasing a need for better cash management.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue975.18M766.89M595.34M425.49M318.79M
Gross Profit395.96M250.87M186.03M162.15M132.91M
EBITDA133.40M41.10M-14.35M7.15M19.21M
Net Income46.92M-33.61M-55.76M-27.69M-3.19M
Balance Sheet
Total Assets1.57B1.46B1.13B784.41M434.39M
Cash, Cash Equivalents and Short-Term Investments268.63M296.87M132.74M72.79M67.25M
Total Debt424.09M425.06M5.71M7.09M8.40M
Total Liabilities519.52M510.97M93.81M64.66M40.22M
Stockholders Equity1.06B953.45M1.03B719.75M394.17M
Cash Flow
Free Cash Flow-32.80M-163.15M-273.30M-321.45M-113.38M
Operating Cash Flow154.29M75.94M-43.23M647.00K21.19M
Investing Cash Flow-187.09M-239.09M-233.36M-322.10M-162.46M
Financing Cash Flow4.57M327.29M336.54M326.99M199.04M

Freshpet Technical Analysis

Technical Analysis Sentiment
Negative
Last Price69.39
Price Trends
50DMA
76.85
Negative
100DMA
81.41
Negative
200DMA
113.81
Negative
Market Momentum
MACD
-1.99
Negative
RSI
42.00
Neutral
STOCH
40.24
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FRPT, the sentiment is Negative. The current price of 69.39 is below the 20-day moving average (MA) of 70.49, below the 50-day MA of 76.85, and below the 200-day MA of 113.81, indicating a bearish trend. The MACD of -1.99 indicates Negative momentum. The RSI at 42.00 is Neutral, neither overbought nor oversold. The STOCH value of 40.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FRPT.

Freshpet Risk Analysis

Freshpet disclosed 35 risk factors in its most recent earnings report. Freshpet reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Freshpet Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
DADAR
81
Outperform
$5.70B33.583.79%-11.02%-68.34%
79
Outperform
$6.29B8.8823.47%2.36%3.82%
75
Outperform
$3.32B23.138.22%14.22%-1.81%
71
Outperform
$2.36B21.138.07%-4.60%-26.61%
69
Neutral
$2.26B29.868.20%2.68%0.49%-12.32%
65
Neutral
$26.97B15.50-4.18%3.32%1.01%1.53%
61
Neutral
$3.51B228.581.54%23.24%60.35%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FRPT
Freshpet
69.39
-49.45
-41.61%
BRFS
BRF SA
3.69
0.04
1.10%
CENT
Central Garden Pet
39.84
0.49
1.25%
DAR
Darling Ingredients
35.62
-2.25
-5.94%
JJSF
J & J Snack Foods
115.98
-48.29
-29.40%
SMPL
Simply Good Foods
33.07
-4.14
-11.13%

Freshpet Corporate Events

Executive/Board ChangesShareholder Meetings
Freshpet Holds 2025 Annual Stockholders Meeting
Neutral
Jun 24, 2025

At the 2025 Annual Meeting of Stockholders held on June 24, Freshpet, Inc. announced the election of all nominated directors to its Board, ratified the appointment of KPMG LLP as its independent auditor, and approved the executive compensation plan. The stockholders also voted for annual advisory votes on executive compensation, aligning with the Board’s recommendation. These decisions reflect Freshpet’s commitment to maintaining strong governance and transparency, potentially enhancing its position in the pet food industry.

The most recent analyst rating on (FRPT) stock is a Buy with a $157.00 price target. To see the full list of analyst forecasts on Freshpet stock, see the FRPT Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Freshpet Reports Q1 2025 Results with Sales Growth
Neutral
May 5, 2025

On May 5, 2025, Freshpet reported its first quarter financial results, showing a 17.6% increase in net sales to $263.2 million compared to the previous year. Despite this growth, the company experienced a net loss of $12.7 million, attributed to increased selling, general, and administrative expenses. Freshpet’s CEO, Billy Cyr, acknowledged the need to adjust growth plans due to economic challenges and updated the company’s 2025 outlook, expecting net sales between $1.12 billion and $1.15 billion, and adjusted EBITDA between $190 million and $210 million. The company aims to navigate current economic headwinds while continuing to deliver long-term value.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 17, 2025