Sprouts Farmers (SFM) AI Stock Analysis

• Market Cap: $7.81B
• Dividend Yield: N/A
• Average Volume (3M): 2.12M
• Price to Earnings (P/E): 15.1
• Beta (1Y): 0.63
• Revenue Growth: 16.60%
• EPS Growth: 49.76%
• Country: US
• Employees: 35,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Grocery Stores
• EPS (TTM): 1.22
• Shares Outstanding: 97,369,440
• 10 Day Avg. Volume: 2,352,117
• 30 Day Avg. Volume: 2,121,555
• PEG Ratio: 0.67
• Price to Book (P/B): 9.67
• Price to Sales (P/S): 1.66
• P/FCF Ratio: 30.80
• Enterprise Value/Market Cap: 1.58
• Enterprise Value/Revenue: 1.43
• Enterprise Value/Gross Profit: 3.66
• Enterprise Value/Ebitda: 15.03
• 1Y Price Target: $120.82
• Price Target Upside: 54.66% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 5.27
• Revenue Forecast (FY): $8.81B

• Rating: 69 Neutral
• Price Target: $92.00 ▲(17.77% Upside)

Sprouts Farmers Market shows strong financial performance and promising growth potential, particularly in earnings and store expansion. However, technical indicators suggest bearish momentum, and valuation metrics indicate moderate attractiveness. The earnings call provided positive insights but also highlighted challenges in consumer demand and competition.

Positive Factors

Earnings Growth

Strong earnings growth indicates effective business strategies and operational efficiency, enhancing long-term financial stability and investor confidence.

Store Expansion

Aggressive store expansion supports revenue growth and market penetration, positioning Sprouts for sustained competitive advantage in the grocery sector.

E-commerce Growth

Significant e-commerce growth reflects adaptation to consumer trends and enhances Sprouts' ability to capture online market share, driving future sales.

Negative Factors

High Leverage

High leverage can increase financial risk, limit flexibility, and strain cash flows, potentially impacting long-term financial health and growth capacity.

Softening Consumer Impact

A softening consumer environment may dampen sales growth and profitability, posing challenges to maintaining revenue momentum in the near term.

Margin Pressures

Rising SG&A expenses can erode profit margins, potentially affecting the company's ability to sustain profitability and invest in growth initiatives.

Sprouts Farmers Business Overview & Revenue Model

Company Description

Sprouts Farmers Market, Inc. offers fresh, natural, and organic food products in the United States. The company offers perishable product categories, including fresh produce, meat, seafood, deli, bakery, floral and dairy, and dairy alternatives; and non-perishable product categories, such as grocery, vitamins and supplements, bulk items, frozen foods, beer and wine, and natural health and body care. As of January 2, 2022, it operated 374 stores in 23 states. Sprouts Farmers Market, Inc. was founded in 2002 and is headquartered in Phoenix, Arizona.

How the Company Makes Money

Sprouts Farmers Market generates revenue primarily through the sale of grocery items, including fresh produce, organic products, and health-oriented items. Its key revenue streams include in-store sales from its various product categories, including produce, packaged goods, meat, and dairy. Additionally, Sprouts benefits from its bulk food sections, which often attract cost-conscious consumers. The company also engages in strategic partnerships with local and regional suppliers to enhance its product offerings and promote local agriculture, thereby potentially increasing customer loyalty and foot traffic. Seasonal promotions, loyalty programs, and an emphasis on customer service further contribute to its earnings by fostering repeat business.

Sprouts Farmers Financial Statement Overview

Summary

Sprouts Farmers Market demonstrates strong financial performance with consistent revenue growth and robust profitability metrics. The income statement shows a 4.05% revenue increase and a healthy net profit margin of 5.77%. The balance sheet is moderate with a manageable debt-to-equity ratio of 1.29, but the equity ratio suggests potential financial vulnerability. Cash flow is positive, with a 3.39% growth in free cash flow, indicating strong cash generation capabilities.

Income Statement

Sprouts Farmers shows strong performance in the income statement with consistent revenue growth, evidenced by a 4.05% increase in TTM. The gross profit margin is robust at 38.69%, indicating efficient cost management. Net profit margin has improved to 5.77%, reflecting enhanced profitability. EBIT and EBITDA margins are healthy, supporting operational efficiency.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio of 1.29, which is manageable but indicates reliance on debt financing. Return on equity is impressive at 36.53%, showcasing effective use of shareholder funds. However, the equity ratio is relatively low, suggesting potential vulnerability to financial fluctuations.

Cash Flow

Cash flow analysis shows positive trends with a 3.39% growth in free cash flow, indicating strong cash generation capabilities. The operating cash flow to net income ratio is slightly above 1, demonstrating efficient conversion of income to cash. The free cash flow to net income ratio is healthy at 67.07%, supporting sustainable operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.65B	7.72B	6.84B	6.40B	6.10B	6.47B
Gross Profit	3.38B	2.96B	2.54B	2.36B	2.22B	2.39B
EBITDA	823.62M	645.07M	518.59M	493.49M	464.38M	518.17M
Net Income	513.45M	380.60M	258.86M	261.16M	244.16M	287.45M
Balance Sheet
Total Assets	4.01B	3.64B	3.33B	3.07B	2.92B	2.81B
Cash, Cash Equivalents and Short-Term Investments	322.42M	265.16M	201.79M	293.23M	245.29M	169.70M
Total Debt	1.86B	1.68B	1.66B	1.54B	1.51B	1.47B
Total Liabilities	2.58B	2.32B	2.18B	2.02B	1.96B	1.93B
Stockholders Equity	1.43B	1.32B	1.15B	1.05B	959.88M	881.29M
Cash Flow
Free Cash Flow	457.56M	414.84M	239.76M	247.32M	262.42M	372.07M
Operating Cash Flow	702.33M	645.21M	465.07M	371.33M	364.80M	494.04M
Investing Cash Flow	-244.77M	-230.38M	-238.34M	-124.01M	-102.38M	-121.97M
Financing Cash Flow	-443.81M	-351.50M	-318.05M	-199.13M	-186.86M	-287.41M

Sprouts Farmers Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 78.12
• 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 SFM, the sentiment is Negative. The current price of 78.12 is below the 20-day moving average (MA) of 82.10, below the 50-day MA of 88.03, and below the 200-day MA of 134.61, indicating a bearish trend. The MACD of -2.16 indicates Negative momentum. The RSI at 36.60 is Neutral, neither overbought nor oversold. The STOCH value of 33.21 is Neutral, 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
NGVC	70 Neutral	$583.89M	12.83	24.02%	1.99%	7.19%	35.90%
SFM	69 Neutral	$7.81B	15.13	36.96%	―	16.60%	49.76%
WMK	67 Neutral	$1.64B	17.38	7.22%	2.06%	3.11%	6.54%
ACI	64 Neutral	$9.59B	10.18	32.04%	3.49%	2.08%	-1.63%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
KR	56 Neutral	$39.42B	57.06	7.75%	2.15%	-1.77%	-70.83%
GO	52 Neutral	$986.28M	-214.29	-0.37%	―	7.22%	-108.99%

Sprouts Farmers Corporate Events

Sprouts Farmers Reports Strong Q3 2025 Performance

Sprouts Farmers Market reported a strong third quarter for 2025, with net sales reaching $2.2 billion, marking a 13% increase from the previous year. The company opened nine new stores, bringing the total to 464, and achieved a comparable store sales growth of 5.9%. Sprouts also authorized a new $1 billion share repurchase program and entered into a new $600 million credit facility. Looking ahead, the company projects a full-year net sales growth of approximately 14% and plans to open 37 new stores by the end of 2025.