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

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FRPT

Freshpet

(NASDAQ:FRPT)

Rating:58Neutral
Price Target:
$59.00
▲(1.58% Upside)
Freshpet's overall stock score of 58 reflects a company with solid revenue growth and operational improvements but facing challenges in profitability and valuation. The technical analysis indicates bearish momentum, while the earnings call provides a mixed outlook with both positive operational developments and caution due to economic uncertainties. The high P/E ratio suggests potential overvaluation, and the lack of a dividend yield further impacts its attractiveness.
Positive Factors
Operational Efficiency
Continued operational progress allows FRPT to deliver margin gains despite a softer sales environment.
Product Expansion
The rollout of products to 125 Sam’s Club locations could serve as a significant incremental revenue driver for the company.
Profitability
Stronger profitability metrics offset softer revenues, leading to higher-than-expected operating income and AEBITDA.
Negative Factors
Consumer Conversion
Freshpet is having trouble persuading additional kibble consumers to convert to the fresh dog food concept.
Growth Outlook
FRPT acknowledges a lower topline growth outlook through 2027 due to current consumer macro conditions.
Sales Guidance
Management lowered sales guidance for 2025 for the second time this year.

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

Freshpet Business Overview & Revenue Model

Company DescriptionFreshpet, Inc. is a leading pet food company specializing in the production of fresh, refrigerated pet food products for dogs and cats. Founded in 2006 and headquartered in Secaucus, New Jersey, Freshpet operates in the pet care sector, focusing on providing natural and nutritious food options that cater to the growing demand for healthier pet diets. The company's core offerings include a variety of fresh pet food recipes made with high-quality ingredients, available through various retail channels including grocery stores, pet specialty shops, and online platforms.
How the Company Makes MoneyFreshpet generates revenue primarily through the sale of its fresh pet food products. The company's revenue model is built around direct sales to retailers, where Freshpet's products are sold in refrigerated sections, often requiring specialized distribution and handling. Key revenue streams include sales from major supermarket chains, pet stores, and e-commerce platforms. Freshpet benefits from strong brand recognition and consumer loyalty, which help drive sales growth. Additionally, the company has entered into strategic partnerships with retailers to enhance product placement and visibility, further contributing to its earnings. Marketing campaigns and promotions aimed at educating pet owners about the benefits of fresh pet food also play a significant role in increasing consumer demand and driving revenue.

Freshpet Earnings Call Summary

Earnings Call Date:Aug 04, 2025
(Q2-2025)
|
% Change Since: -11.80%|
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment. While operational improvements, digital sales growth, and reduced capital expenditure are positive indicators, they are offset by challenges in the dog food category, lowered sales guidance, and the removal of long-term sales targets, indicating caution amid economic uncertainties.
Q2-2025 Updates
Positive Updates
Strong Operational Performance
Ennis has become the most profitable plant sooner than planned, and operational improvements have led to a healthy improvement in adjusted gross margin, reaching 46.9% compared to 45.9% in the prior year.
Capital Expenditure Reduction
Freshpet is lowering CapEx estimates for 2025 and 2026 by a total of at least $100 million due to operational efficiencies and new production technologies.
Expansion in Digital Sales
Digital orders, previously referred to as e-commerce, grew by 40% in the second quarter and now account for 13% of sales.
Adjusted EBITDA Growth
Adjusted EBITDA in the second quarter was $44.4 million, up approximately $9 million or 26% year-over-year.
Negative Updates
Sluggish Dog Food Category Demand
The dog food market is facing a significant headwind, with consumers hesitant to trade up due to economic uncertainties and other factors.
Lowered Net Sales Guidance
Net sales growth guidance for fiscal year 2025 has been reduced to 13% to 16% from the previous 15% to 18% due to the challenging macroeconomic environment.
Removal of Long-term Sales Target
The $1.8 billion net sales target and the related 20 million household target for fiscal year 2027 have been removed due to reduced category growth rates.
Company Guidance
During the Freshpet Second Quarter 2025 Earnings Call, the management provided guidance for the fiscal year 2025, projecting net sales growth of 13% to 16% and maintaining an adjusted EBITDA range of $190 million to $210 million. They plan to lower capital expenditures for 2025 and 2026 by a total of at least $100 million, attributing this to operational improvements and new technologies. Freshpet aims to be free cash flow positive in 2026. The company expects to achieve a 48% adjusted gross margin and a 22% adjusted EBITDA margin by 2027, assuming sales volume growth remains at least in the teens annually. Despite a challenging economic environment, Freshpet is focusing on marketing, distribution expansion, and value-focused products to drive growth and maintain financial targets.

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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.04B975.18M766.89M595.34M425.49M318.79M
Gross Profit425.82M395.96M250.87M186.03M162.15M132.91M
EBITDA83.45M133.40M41.10M-14.35M7.15M19.21M
Net Income33.68M46.92M-33.61M-55.76M-27.69M-3.19M
Balance Sheet
Total Assets1.65B1.57B1.46B1.13B784.41M434.39M
Cash, Cash Equivalents and Short-Term Investments243.68M268.63M296.87M132.74M72.79M67.25M
Total Debt495.15M424.09M425.06M5.71M7.09M8.40M
Total Liabilities575.84M519.52M510.97M93.81M64.66M40.22M
Stockholders Equity1.07B1.06B953.45M1.03B719.75M394.17M
Cash Flow
Free Cash Flow60.10M-32.80M-163.15M-273.30M-321.45M-113.38M
Operating Cash Flow145.16M154.29M75.94M-43.23M647.00K21.19M
Investing Cash Flow-152.23M-187.09M-239.09M-233.36M-322.10M-162.46M
Financing Cash Flow-948.00K4.57M327.29M336.54M326.99M199.04M

Freshpet Technical Analysis

Technical Analysis Sentiment
Negative
Last Price58.08
Price Trends
50DMA
67.82
Negative
100DMA
73.57
Negative
200DMA
103.00
Negative
Market Momentum
MACD
-2.89
Positive
RSI
36.80
Neutral
STOCH
26.05
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 58.08 is below the 20-day moving average (MA) of 63.48, below the 50-day MA of 67.82, and below the 200-day MA of 103.00, indicating a bearish trend. The MACD of -2.89 indicates Positive momentum. The RSI at 36.80 is Neutral, neither overbought nor oversold. The STOCH value of 26.05 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 36 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 (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$6.13B9.4721.17%2.39%-1.19%78.79%
71
Outperform
$2.94B20.488.22%14.22%-1.81%
67
Neutral
$2.09B16.478.70%-4.90%0.29%
65
Neutral
$5.44B52.742.32%-6.25%-71.35%
65
Neutral
$2.25B27.028.79%2.75%0.50%-4.46%
63
Neutral
$20.46B14.51-3.60%3.15%2.60%-5.31%
58
Neutral
$2.75B85.113.26%19.30%33.65%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FRPT
Freshpet
58.08
-77.10
-57.04%
BRFS
BRF SA
3.65
-0.92
-20.13%
CENT
Central Garden Pet
35.81
-3.58
-9.09%
DAR
Darling Ingredients
34.41
-7.15
-17.20%
JJSF
J & J Snack Foods
113.50
-49.80
-30.50%
SMPL
Simply Good Foods
28.74
-3.04
-9.57%

Freshpet Corporate Events

Business Operations and StrategyFinancial Disclosures
Freshpet Reports Strong Q2 2025 Financial Results
Positive
Aug 4, 2025

On August 4, 2025, Freshpet reported its financial results for the second quarter of 2025, showing a significant increase in net sales and net income compared to the previous year. Despite economic challenges, the company achieved a 12.5% increase in net sales and a net income of $16.4 million, driven by volume gains and improved operational efficiencies. Freshpet has updated its 2025 outlook, reducing its net sales target to reflect current economic conditions but maintaining its commitment to growth and shareholder value.

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.

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: Aug 26, 2025