Sprouts Farmers (SFM) AI Stock Analysis

• Market Cap: $14.39B
• Dividend Yield: N/A
• Average Volume (3M): 1.50M
• Price to Earnings (P/E): 31.1
• Beta (1Y): 0.49
• Revenue Growth: 16.83%
• EPS Growth: 52.71%
• Country: US
• Employees: 35,000
• Sector: Consumer Defensive
• Sector Strength: 61
• Industry: Grocery Stores
• EPS (TTM): 1.35
• Shares Outstanding: 97,726,166
• 10 Day Avg. Volume: 1,537,443
• 30 Day Avg. Volume: 1,497,770
• 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: 1.22
• Enterprise Value/Revenue: 2.17
• Enterprise Value/Gross Profit: 5.64
• Enterprise Value/Ebitda: 20.16
• 1Y Price Target: $180.18
• Price Target Upside: 21.41% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 67 Neutral
• Price Target: $157.00 ▲(5.79% Upside)

Sprouts Farmers Market's overall stock score of 67 reflects a strong financial performance and positive earnings call, offset by bearish technical indicators and a high valuation. The company's strategic initiatives, such as share buybacks and securing a new credit facility, provide additional support for future growth.

Positive Factors

Digital Growth

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

Earnings

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

Store Expansion

SFM has significant runway for store growth and geographic expansion and the ability to reach new customers through its growing e-commerce business.

Negative Factors

Sales/Margin Risk

Sales/margin risk if consumer sentiment worsens and price investments are needed to stimulate traffic, especially as price gaps for SFM have widened.

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 (SFM) is a grocery retailer that specializes in providing fresh, natural, and organic products. Founded in 2004, the company operates a chain of stores across the United States, offering a wide range of products including fresh produce, bulk foods, vitamins and supplements, and specialty grocery items. Sprouts is known for its farmer's market-style shopping experience, emphasizing healthy living and sustainability.

How the Company Makes Money

Sprouts Farmers Market generates revenue primarily through the sale of grocery products in their retail stores. Key revenue streams include fresh produce, packaged groceries, vitamins and supplements, and prepared foods. The company benefits from a strong focus on organic and natural products, which often carry higher margins compared to conventional items. Additionally, Sprouts engages in promotional pricing and loyalty programs to drive sales. The company also leverages partnerships with local farmers and suppliers to enhance product offerings and appeal to health-conscious consumers. Seasonal promotions and community events further contribute to customer engagement and sales growth.

Sprouts Farmers Financial Statement Overview

Summary

Sprouts Farmers demonstrates a solid financial performance with strong revenue growth, profitability, and efficient cash flow management. The company's leverage is moderate, but 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: 148.41
• 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 148.41 is below the 20-day moving average (MA) of 150.93, below the 50-day MA of 158.20, and below the 200-day MA of 153.50, indicating a bearish trend. The MACD of -3.63 indicates Negative momentum. The RSI at 42.56 is Neutral, neither overbought nor oversold. The STOCH value of 63.31 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
KR	70 Outperform	$46.76B	19.22	24.06%	1.82%	-2.11%	25.03%
NGVC	70 Outperform	$934.23M	21.67	23.58%	1.13%	8.51%	40.83%
SFM	67 Neutral	$14.39B	31.12	36.94%	―	16.83%	52.71%
GO	63 Neutral	$1.79B	232.41	0.68%	―	8.47%	-85.17%
Sector *	63 Neutral	$20.95B	14.50	-3.82%	3.12%	2.72%	-11.24%
ACI	61 Neutral	$10.88B	11.85	31.10%	2.89%	1.96%	-14.99%
IMKTA	52 Neutral	$1.22B	22.10	3.58%	1.01%	-7.96%	-64.67%

Sprouts Farmers Corporate Events

Sprouts Farmers Approves $1 Billion Share Buyback

On August 13, 2025, Sprouts Farmers Market’s Board of Directors approved a new $1 billion share repurchase authorization, replacing the previous program with $143 million remaining. This initiative, reflecting the company’s strong cash flow and strategic confidence, aims to return excess cash to shareholders and may be adjusted based on market conditions and investment opportunities.

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%.

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.

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.

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.