Sprouts Farmers (SFM) AI Stock Analysis

• Market Cap: $15.71B
• Dividend Yield: N/A
• Average Volume (3M): 1.63M
• Price to Earnings (P/E): 36.3
• Beta (1Y): 0.55
• Revenue Growth: 15.51%
• EPS Growth: 53.77%
• Country: US
• Employees: 35,000
• Sector: Consumer Defensive
• Sector Strength: 63
• Industry: Grocery Stores
• EPS (TTM): 1.81
• Shares Outstanding: 97,858,620
• 10 Day Avg. Volume: 1,655,762
• 30 Day Avg. Volume: 1,634,364
• PEG Ratio: 0.98
• Price to Book (P/B): 3.35
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 14.17
• Enterprise Value/Market Cap: 0.30
• Enterprise Value/Revenue: 0.16
• Enterprise Value/Gross Profit: 1.53
• Enterprise Value/Ebitda: 1.53
• 1Y Price Target: $184.83
• Price Target Upside: 14.65% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 70 Outperform
• Price Target: $178.00 ▲(10.41%Upside)

Sprouts Farmers Market shows robust financial performance and promising future growth prospects, highlighted by strong earnings call outcomes. However, technical analysis and high valuation raise concerns about potential short-term price weakness and overvaluation. The overall score reflects a balanced view of strong company fundamentals and market caution.

Positive Factors

Customer Base Growth

The company sees continued growth in its customer base supported by assortment enhancements, geographic expansion, and marketing efforts.

Sales and Margin Strength

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

Negative Factors

Competitive Challenges

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

Consumer Sentiment Risk

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

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 solid financial performance with strong revenue growth, profitability, and efficient cash flow management. The income statement and cash flow metrics indicate robust overall health. However, moderate leverage suggests an opportunity to improve the equity base for greater stability.

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	Mar 2023	Mar 2022	Mar 2021
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
	EBIT
582.56M	504.50M	350.23M	358.36M	334.08M	391.67M
	EBITDA
868.27M	785.79M	482.12M	604.76M	568.13M	617.45M
	Net Income Common Stockholders
446.53M	380.60M	258.86M	261.16M	244.16M	287.45M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
285.66M	265.16M	201.79M	293.23M	245.29M	169.70M
	Total Assets
3.74B	3.64B	3.33B	3.07B	2.92B	2.81B
	Total Debt
1.72B	1.68B	1.66B	1.54B	1.51B	1.47B
	Net Debt
1.43B	1.41B	1.46B	1.25B	1.26B	1.30B
	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: Neutral
• Last Price: 161.21
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SFM, the sentiment is Neutral. The current price of 161.21 is below the 20-day moving average (MA) of 165.65, below the 50-day MA of 164.26, and above the 200-day MA of 143.08, indicating a neutral trend. The MACD of -1.13 indicates Positive momentum. The RSI at 46.73 is Neutral, neither overbought nor oversold. The STOCH value of 37.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SFM.

Sprouts Farmers Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SFM	70 Outperform	$15.71B	36.29	35.74%	―	15.51%	53.77%
KR	69 Neutral	$43.95B	17.97	26.59%	1.94%	-1.94%	23.94%
NGVC	67 Neutral	$931.33M	22.81	23.38%	1.18%	9.36%	43.17%
ACI	67 Neutral	$12.39B	13.11	31.26%	2.79%	1.46%	-26.54%
Sector *	65 Neutral	$8.77B	15.11	4.67%	3.71%	3.60%	-2.96%
IMKTA	61 Neutral	$1.14B	18.79	4.00%	1.08%	-7.79%	-64.85%
GO	60 Neutral	$1.27B	76.66	1.43%	―	10.37%	-73.84%

Sprouts Farmers Corporate Events

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.

Sprouts Farmers Reports Strong Q1 2025 Financial Results

Sprouts Farmers Market reported strong financial results for the first quarter of 2025, with net sales reaching $2.2 billion, a 19% increase from the previous year. The company also saw a comparable store sales growth of 11.7% and a significant rise in diluted earnings per share to $1.81. Sprouts opened three new stores, bringing its total to 443 locations, and ended the quarter with $286 million in cash and no debt on its revolving credit facility. The company repurchased 1.6 million shares of common stock and generated $299 million in cash from operations. Looking ahead, Sprouts anticipates continued growth with plans to open at least 35 new stores and achieve net sales growth of 12% to 14% for the full year 2025.