Sprouts Farmers (SFM) AI Stock Analysis

• Market Cap: $14.81B
• Dividend Yield: N/A
• Average Volume (3M): 1.99M
• Price to Earnings (P/E): 31.2
• Beta (1Y): 0.51
• Revenue Growth: 16.83%
• EPS Growth: 52.71%
• Country: US
• Employees: 35,000
• Sector: Consumer Defensive
• Sector Strength: 51
• Industry: Grocery Stores
• EPS (TTM): 1.35
• Shares Outstanding: 97,726,166
• 10 Day Avg. Volume: 1,193,148
• 30 Day Avg. Volume: 1,986,289
• PEG Ratio: 3.42
• Price to Book (P/B): 10.93
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 30.51
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 0.54
• Enterprise Value/Gross Profit: 5.26
• Enterprise Value/Ebitda: 5.27
• 1Y Price Target: $182.70
• Price Target Upside: 20.56% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 72 Outperform
• Price Target: $175.00 ▲(15.48%Upside)

Sprouts Farmers Market demonstrates strong financial performance and strategic growth initiatives, highlighted by significant sales and earnings growth, and supported by positive corporate events. However, the high P/E ratio and mixed technical indicators suggest valuation concerns and potential short-term volatility. The overall score reflects a generally positive outlook with some caution due to valuation metrics.

Positive Factors

Earnings

Sprouts Farmers Market's sales and margin strength continues, leading to an analyst recommendation to raise the price objective to $200.

Sales Growth

SFM's digital sales grew 28% year over year, now comprising 15% of total sales.

Negative Factors

Market Comparison

Key bear concerns include tough compares and high expectations given SFM's impressive track record of sales/EPS upside.

Valuation Concerns

Compares get much tougher in the back half of the year and valuation is high, with the stock already trading at 30x the bull case.

Sprouts Farmers Business Overview & Revenue Model

Company Description

Sprouts Farmers Market, Inc. is a leading American supermarket chain that specializes in offering fresh, organic, and natural products. Founded in 2002 and headquartered in Phoenix, Arizona, Sprouts operates in the grocery store sector, focusing on providing affordable, wholesome, and innovative food options. The company emphasizes a farm-fresh layout with a wide range of products including fresh produce, bulk foods, vitamins and supplements, dairy, meat and seafood, bakery items, and natural body care products.

How the Company Makes Money

Sprouts Farmers Market generates revenue primarily through the sale of grocery products in its retail stores. The company's key revenue streams include fresh produce, grocery items, meat and seafood, bakery goods, and vitamins and supplements. Sprouts differentiates itself by offering a wide selection of organic and natural products, often at competitive prices, which attracts health-conscious consumers. Additionally, the company leverages strategic partnerships with local farmers and suppliers to maintain a steady flow of high-quality products. Sprouts' revenue is also supported by its private-label products, which offer higher margins. The company's business model is characterized by its focus on providing a unique shopping experience centered around health and wellness, which helps in retaining and expanding its customer base.

Sprouts Farmers Financial Statement Overview

Summary

Sprouts Farmers demonstrates a solid financial performance across all verticals, with notable revenue growth, profitability, and efficient cash flow management. While the company's leverage is moderate, its strong ROE and cash flow ratios indicate robust overall health. Continued focus on improving the equity base could enhance financial stability further.

Income Statement

Sprouts Farmers shows strong revenue growth with a TTM revenue of $8.07 billion, up from $7.72 billion in the previous year, marking a revenue growth rate of 4.55%. The gross profit margin is robust at 38.06%, indicating effective cost management. The net profit margin has improved to 5.53% TTM, reflecting enhanced profitability. EBIT margin stands at 7.26% and EBITDA margin at 8.95% TTM, both showcasing efficient operations. Overall, the income statement reflects a healthy growth trajectory with solid profitability metrics.

Balance Sheet

The company maintains a balanced financial structure with a debt-to-equity ratio of 1.33, indicating moderate leverage. Return on Equity (ROE) is strong at 34.67% TTM, demonstrating effective use of equity to generate profits. The equity ratio is 34.45%, suggesting a stable financial foundation. While the leverage is moderate, there is an opportunity to improve the equity base for greater stability.

Cash Flow

Sprouts Farmers' cash flow analysis reveals a positive trend with a free cash flow growth rate of 17.15% TTM. The operating cash flow to net income ratio is favorable at 1.62, indicating good cash generation relative to profit. The free cash flow to net income ratio is 1.09, showing effective conversion of profits into free cash flow. The company maintains strong cash flow management, supporting its operational and financial commitments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.07B	7.72B	6.84B	6.40B	6.10B	6.47B
Gross Profit	3.11B	2.94B	2.52B	2.35B	2.21B	2.38B
EBITDA	868.27M	785.79M	482.12M	604.76M	568.13M	617.45M
Net Income	446.53M	380.60M	258.86M	261.16M	244.16M	287.45M
Balance Sheet
Total Assets	3.74B	3.64B	3.33B	3.07B	2.92B	2.81B
Cash, Cash Equivalents and Short-Term Investments	285.66M	265.16M	201.79M	293.23M	245.29M	169.70M
Total Debt	1.72B	1.68B	1.66B	1.54B	1.51B	1.47B
Total Liabilities	2.45B	2.32B	2.18B	2.02B	1.96B	1.93B
Stockholders Equity	1.29B	1.32B	1.15B	1.05B	959.88M	881.29M
Cash Flow
Free Cash Flow	486.00M	414.84M	239.76M	247.32M	262.42M	372.07M
Operating Cash Flow	724.61M	645.21M	465.07M	371.33M	364.80M	494.04M
Investing Cash Flow	-238.61M	-230.38M	-238.34M	-124.01M	-102.38M	-121.97M
Financing Cash Flow	-512.61M	-351.50M	-318.05M	-199.13M	-186.86M	-287.41M

Sprouts Farmers Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 151.54
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SFM, the sentiment is Negative. The current price of 151.54 is below the 20-day moving average (MA) of 162.04, below the 50-day MA of 164.03, and above the 200-day MA of 151.23, indicating a neutral trend. The MACD of -1.78 indicates Positive momentum. The RSI at 34.34 is Neutral, neither overbought nor oversold. The STOCH value of 17.50 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SFM.

Sprouts Farmers Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SFM	72 Outperform	$14.81B	31.22	36.94%	―	16.83%	52.71%
KR	68 Neutral	$45.82B	18.84	24.06%	1.83%	-2.11%	25.03%
NGVC	66 Neutral	$848.25M	20.78	23.38%	1.21%	9.36%	43.17%
Sector *	65 Neutral	$24.37B	12.95	-0.84%	3.08%	1.71%	-10.31%
GO	64 Neutral	$1.29B	78.21	1.43%	―	10.37%	-73.84%
IMKTA	63 Neutral	$1.16B	19.19	4.00%	1.03%	-7.79%	-64.85%
ACI	61 Neutral	$11.01B	11.99	31.10%	2.97%	1.96%	-14.99%

Sprouts Farmers Corporate Events

Sprouts Farmers Reports Strong Q2 2025 Financial Results

Sprouts Farmers Market reported strong financial results for the second quarter of 2025, with net sales reaching $2.2 billion, a 17% increase from the previous year. The company also saw a 10.2% growth in comparable store sales and a significant rise in diluted earnings per share from $0.94 to $1.35. Sprouts opened 12 new stores, bringing the total to 455, and ended the quarter with $261 million in cash and no debt on its revolving credit facility. The company repurchased 0.5 million shares and generated $410 million in cash from operations. Looking ahead, Sprouts expects continued growth with plans to open at least 35 new stores in 2025 and achieve net sales growth between 14.5% and 16%.

The most recent analyst rating on (SFM) stock is a Hold with a $182.00 price target. To see the full list of analyst forecasts on Sprouts Farmers stock, see the SFM Stock Forecast page.

Sprouts Farmers Secures New $600M Credit Facility

On July 25, 2025, Sprouts Farmers Market, Inc. announced the closing of a $600 million revolving credit facility, replacing its previous $700 million facility. The new credit agreement provides Sprouts with greater financial flexibility, allowing the company to support its operations and growth plans through robust cash flow generation. The facility, which matures in July 2030, includes revised pricing terms and additional covenant flexibility, with no outstanding borrowings at the time of closing.

The most recent analyst rating on (SFM) stock is a Buy with a $185.00 price target. To see the full list of analyst forecasts on Sprouts Farmers stock, see the SFM Stock Forecast page.

Sprouts Farmers Extends Distribution Agreement with KeHE

On July 17, 2025, Sprouts Farmers Market, Inc. extended its distribution agreement with KeHE Distributors, LLC, its main distributor for dry grocery and frozen foods, beyond the original expiration date of July 18, 2025. This extension allows both parties to continue negotiations for a long-term agreement, which could impact Sprouts’ supply chain stability and market operations.

The most recent analyst rating on (SFM) stock is a Buy with a $185.00 price target. To see the full list of analyst forecasts on Sprouts Farmers stock, see the SFM Stock Forecast page.

Sprouts Farmers Market Holds Annual Stockholder Meeting

On May 21, 2025, Sprouts Farmers Market, Inc. held its annual meeting of stockholders, where several key proposals were voted on, including the declassification of the company’s board of directors. This amendment will transition the board to annual elections by 2028, allowing directors to be removed with or without cause, aligning with Delaware law. The declassification aims to enhance corporate governance and accountability. Additionally, the stockholders elected two Class III directors, approved executive compensation for 2024, and ratified PricewaterhouseCoopers LLP as the independent accounting firm for 2025.

The most recent analyst rating on (SFM) stock is a Hold with a $102.00 price target. To see the full list of analyst forecasts on Sprouts Farmers stock, see the SFM Stock Forecast page.