Freshpet (FRPT) AI Stock Analysis

• Market Cap: $2.61B
• Dividend Yield: N/A
• Average Volume (3M): 1.44M
• Price to Earnings (P/E): 80.8
• Beta (1Y): 1.08
• Revenue Growth: 19.30%
• EPS Growth: 33.65%
• Country: US
• Employees: 1,296
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): 0.33
• Shares Outstanding: 48,779,873
• 10 Day Avg. Volume: 1,702,123
• 30 Day Avg. Volume: 1,438,228
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.41
• Enterprise Value/Revenue: 3.51
• Enterprise Value/Gross Profit: 8.60
• Enterprise Value/Ebitda: 43.89
• 1Y Price Target: $78.36
• Price Target Upside: 46.69% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 58 Neutral
• Price Target: $59.00 ▲(10.45% 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

Revenue Growth

Consistent revenue growth indicates effective sales strategies and strong market demand, supporting long-term business expansion and stability.

Operational Improvements

Enhanced operational efficiency and improved margins suggest better cost management, which can sustain profitability over time.

Digital Sales Expansion

Significant growth in digital sales reflects successful adaptation to e-commerce trends, expanding market reach and customer base.

Negative Factors

Profitability Challenges

Declining profit margins indicate difficulties in managing costs, which could hinder long-term financial health and shareholder returns.

Lowered Sales Guidance

Reduced sales guidance reflects challenges in market conditions, potentially impacting revenue targets and strategic growth plans.

Dog Food Category Demand

Weak demand in a key product category could limit sales growth and require strategic adjustments to capture market opportunities.

Freshpet Business Overview & Revenue Model

Company Description

Freshpet, 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 Money

Freshpet 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 Financial Statement Overview

Summary

Freshpet demonstrates solid revenue growth and a strong gross profit margin, indicating effective sales and production strategies. However, the company faces challenges with profitability and operational efficiency, as seen in the declining net profit and EBIT margins. The balance sheet reflects a stable financial position with moderate leverage, but the low return on equity suggests room for improvement in generating returns for shareholders. Cash flow analysis shows strong free cash flow growth, but the conversion of net income to cash flow remains an area to watch. Overall, Freshpet is on a growth trajectory but needs to focus on improving profitability and cash flow conversion.

Income Statement

Freshpet shows a positive revenue growth rate of 2.9% TTM, indicating a steady increase in sales. The gross profit margin is healthy at 40.8%, reflecting efficient production processes. However, the net profit margin is relatively low at 3.2%, suggesting that operating expenses are high. The EBIT and EBITDA margins have decreased compared to the previous year, indicating potential challenges in managing operational costs.

Balance Sheet

The company's debt-to-equity ratio is moderate at 0.46, indicating a balanced approach to leveraging. The return on equity is low at 3.2%, suggesting limited profitability from shareholders' investments. The equity ratio is strong, showing that a significant portion of the company's assets is financed by equity, which is a positive sign of financial stability.

Cash Flow

Freshpet's free cash flow has grown significantly by 359.8% TTM, which is a positive indicator of cash generation. However, the operating cash flow to net income ratio is 1.71, showing that cash flow is not significantly higher than net income. The free cash flow to net income ratio is 0.41, indicating that a substantial portion of net income is not converted into free cash flow, which could be a concern for liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.04B	975.18M	766.89M	595.34M	425.49M	318.79M
Gross Profit	425.82M	395.96M	250.87M	186.03M	162.15M	132.91M
EBITDA	83.45M	133.40M	41.10M	-14.35M	7.15M	19.21M
Net Income	33.68M	46.92M	-33.61M	-55.76M	-27.69M	-3.19M
Balance Sheet
Total Assets	1.65B	1.57B	1.46B	1.13B	784.41M	434.39M
Cash, Cash Equivalents and Short-Term Investments	243.68M	268.63M	296.87M	132.74M	72.79M	67.25M
Total Debt	495.15M	424.09M	425.06M	5.71M	7.09M	8.40M
Total Liabilities	575.84M	519.52M	510.97M	93.81M	64.66M	40.22M
Stockholders Equity	1.07B	1.06B	953.45M	1.03B	719.75M	394.17M
Cash Flow
Free Cash Flow	60.10M	-32.80M	-163.15M	-273.30M	-321.45M	-113.38M
Operating Cash Flow	145.16M	154.29M	75.94M	-43.23M	647.00K	21.19M
Investing Cash Flow	-152.23M	-187.09M	-239.09M	-233.36M	-322.10M	-162.46M
Financing Cash Flow	-948.00K	4.57M	327.29M	336.54M	326.99M	199.04M

Freshpet Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 53.42
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 53.42 is below the 20-day moving average (MA) of 55.51, below the 50-day MA of 62.67, and below the 200-day MA of 95.02, indicating a bearish trend. The MACD of -2.78 indicates Negative momentum. The RSI at 36.52 is Neutral, neither overbought nor oversold. The STOCH value of 23.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FRPT.

Freshpet Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SMPL	71 Outperform	2.67B	18.80	7.89%	―	14.22%	-1.81%
NOMD	69 Neutral	2.08B	9.23	8.25%	4.83%	0.87%	8.59%
CENT	68 Neutral	2.06B	16.38	8.72%	―	-4.90%	0.29%
JJSF	68 Neutral	1.98B	23.70	8.65%	3.06%	0.50%	-4.46%
FRPT	58 Neutral	$2.61B	80.77	3.26%	―	19.30%	33.65%
SJM	52 Neutral	11.22B	-7.78	-24.63%	4.07%	2.54%	-293.39%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%

Freshpet Corporate Events

Freshpet Reports Strong Q2 2025 Financial Results

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.

Freshpet Holds 2025 Annual Stockholders Meeting

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.