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Simply Good Foods (SMPL)
NASDAQ:SMPL

Simply Good Foods (SMPL) AI Stock Analysis

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Simply Good Foods

(NASDAQ:SMPL)

Rating:76Outperform
Price Target:
$39.00
▲( 13.34% Upside)
Simply Good Foods' strong financial performance and promising earnings call guidance are key drivers of the score. While technical analysis suggests caution with bearish trends, the company's robust operational growth and strategic initiatives provide a solid foundation. Valuation remains reasonable, supporting a positive overall outlook.
Positive Factors
Earnings
The stock closed higher due to a strong EBITDA beat, driven by gross margin upside compared to consensus.
Financial Performance
The balance sheet remains stellar with the leverage ratio expected to reach 0.5 by fiscal year-end.
Management and Strategy
The appointment of Christopher J. Bealer as CFO is seen as a positive move due to his robust experience in consumer packaged goods.
Negative Factors
Atkins Brand Performance
The company's strategy suggests the Atkins brand will likely remain pressured in FY26.
Input Costs
Gross margin headwinds from input cost inflation and tariffs will extend into the first half of FY26.
Tariffs and Consumer Demand
There is incremental uncertainty related to tariffs, including the potential impact on consumer demand.

Simply Good Foods (SMPL) vs. SPDR S&P 500 ETF (SPY)

Simply Good Foods Business Overview & Revenue Model

Company DescriptionThe Simply Good Foods Company operates as a consumer packaged food and beverage company in North America and internationally. The company develops, markets, and sells snacks and meal replacements. It offers protein bars, ready-to-drink shakes, sweet and salty snacks, cookies, pizza, protein chips, recipes, and confectionery products, as well as licensed frozen meals under the Atkins, Atkins Endulge, and Quest brand names. The company distributes its products to various retail channels, such as mass merchandise, grocery and drug channels, club stores, convenience stores, gas stations, and other channels. It also sells its products through e-commerce channels, including atkins.com, questnutrition.com, and amazon.com. The Simply Good Foods Company is headquartered in Denver, Colorado.
How the Company Makes MoneySimply Good Foods generates revenue primarily through the sale of its health-oriented food products. The company's key revenue streams include direct sales to consumers through retail partners like supermarkets, convenience stores, and online platforms. Additionally, Simply Good Foods benefits from strategic partnerships with major retail chains, which help increase its market penetration and brand visibility. The company also invests in marketing initiatives to promote its products, driving consumer demand and boosting sales. Factors like growing health trends and consumer preference for convenient nutrition solutions significantly contribute to its earnings.

Simply Good Foods Financial Statement Overview

Summary
Simply Good Foods demonstrates strong revenue and profit growth with a stable financial position, notably with zero debt. However, slight declines in EBITDA margin and free cash flow growth are minor concerns.
Income Statement
85
Very Positive
Simply Good Foods has demonstrated strong growth in its revenue over the past few years, with a revenue growth rate of approximately 7.5% from 2023 to 2024. The company also maintains healthy profitability margins with a gross profit margin of 38.0%, net profit margin of 10.4%, and EBIT margin of 15.5% in the TTM. Although the EBITDA margin slightly decreased from 18.0% to 16.3%, overall profitability remains robust. The consistent revenue and profit growth are strengths, while the slight decline in EBITDA margin is a minor concern.
Balance Sheet
78
Positive
The balance sheet of Simply Good Foods reflects a strong equity position with an equity ratio of 73.0% and a return on equity of 8.0% in the TTM. The company has effectively reduced its total debt to zero, enhancing its financial stability. However, the debt-to-equity ratio has improved significantly, indicating a more conservative capital structure. The high equity ratio and elimination of debt are notable strengths, though leveraging opportunities for growth may be limited.
Cash Flow
80
Positive
Simply Good Foods shows strong cash flow management with a free cash flow growth rate of -7.2% from 2023 to 2024, reflecting a slight decline but remains positive overall. The operating cash flow to net income ratio is robust at 1.41, indicating efficient conversion of income to cash. The free cash flow to net income ratio is similarly healthy at 1.37. Overall, the company displays strong cash flow generation, though the slight decline in free cash flow growth warrants attention.
Breakdown
TTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
1.36B1.33B1.24B1.17B1.01B816.64M
Gross Profit
518.58M511.57M453.42M445.56M409.77M324.33M
EBIT
212.00M206.50M204.95M202.76M173.68M78.22M
EBITDA
240.94M240.06M232.74M198.37M135.64M131.63M
Net Income Common Stockholders
141.87M139.31M133.57M108.57M40.88M65.64M
Balance SheetCash, Cash Equivalents and Short-Term Investments
954.10K132.53M87.72M67.49M75.34M95.85M
Total Assets
404.09M2.44B2.10B2.09B2.05B2.01B
Total Debt
185.42K402.98M289.36M409.54M455.34M601.48M
Net Debt
-768.68K270.45M201.64M342.04M380.00M505.63M
Total Liabilities
312.83K708.66M525.99M655.59M863.41M869.11M
Stockholders Equity
5.00M1.73B1.57B1.44B1.19B1.14B
Cash FlowFree Cash Flow
194.22M209.23M158.93M104.88M125.38M56.25M
Operating Cash Flow
200.20M215.70M171.12M110.64M132.09M58.92M
Investing Cash Flow
-286.75M-286.88M-12.19M-8.16M-2.51M-983.99M
Financing Cash Flow
86.67M115.90M-138.53M-110.03M-150.05M754.65M

Simply Good Foods Technical Analysis

Technical Analysis Sentiment
Negative
Last Price34.41
Price Trends
50DMA
35.29
Negative
100DMA
36.08
Negative
200DMA
35.65
Negative
Market Momentum
MACD
-0.22
Positive
RSI
39.94
Neutral
STOCH
9.22
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SMPL, the sentiment is Negative. The current price of 34.41 is below the 20-day moving average (MA) of 35.79, below the 50-day MA of 35.29, and below the 200-day MA of 35.65, indicating a bearish trend. The MACD of -0.22 indicates Positive momentum. The RSI at 39.94 is Neutral, neither overbought nor oversold. The STOCH value of 9.22 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SMPL.

Simply Good Foods Risk Analysis

Simply Good Foods disclosed 42 risk factors in its most recent earnings report. Simply Good Foods reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Simply Good Foods Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$6.33B8.8523.47%2.36%3.82%
76
Outperform
$3.48B24.008.40%11.47%2.59%
FLFLO
65
Neutral
$3.48B15.3316.34%5.83%-1.02%81.53%
65
Neutral
$4.12B281.101.54%23.24%60.35%
65
Neutral
$8.84B14.904.69%203.33%3.49%-1.84%
58
Neutral
$2.17B28.638.20%2.76%0.49%-12.32%
UTUTZ
53
Neutral
$1.73B38.383.93%1.96%-1.29%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SMPL
Simply Good Foods
34.41
-2.55
-6.90%
BRFS
BRF SA
3.70
0.03
0.82%
FLO
Flowers Foods
16.48
-5.38
-24.61%
JJSF
J & J Snack Foods
111.46
-47.14
-29.72%
FRPT
Freshpet
84.50
-47.56
-36.01%
UTZ
UTZ Brands
12.26
-5.36
-30.42%

Simply Good Foods Earnings Call Summary

Earnings Call Date:Apr 09, 2025
(Q2-2025)
|
% Change Since: 3.68%|
Next Earnings Date:Jun 26, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance from Quest and OWYN, with notable growth in sales and strategic initiatives. However, challenges with Atkins' declining sales and potential cost pressures from tariffs and gross margin declines were significant concerns.
Q2-2025 Updates
Positive Updates
Quest and OWYN Double-Digit Growth
Quest and OWYN, which represent 70% of net sales, grew 12% and 57% respectively in the first half, driving overall company growth.
Quest Salty Snacks Expansion
Quest's Salty Snacks platform grew 45% in the quarter, now representing 35% of total Quest retail sales, with a successful national test at a key club customer.
OWYN Retail Takeaway Growth
OWYN's retail takeaway increased 52%, driven by ready-to-drink shakes growing 53% and a 22% increase in distribution.
Debt Repayment and Repricing
The company repaid $100 million of its term loan since the beginning of the fiscal year and repriced the term loan, saving nearly $2 million annually.
Negative Updates
Atkins Consumption Decline
Atkins consumption declined 10%, driven by reduced display space and distribution losses at a key club customer.
Gross Margin Decline
Gross margin declined 120 basis points to 36.2%, impacted by the inclusion of OWYN and inflationary pressures.
Tariff Impact on Costs
New tariffs are expected to impact 15% to 20% of total COGS, posing a cost headwind of $5 million to $10 million in fiscal 2025.
Company Guidance
During The Simply Good Foods Company's Fiscal Year 2025 Second Quarter Conference Call, management provided guidance reflecting strong performance metrics. Quest and OWYN brands demonstrated substantial growth, with retail sales increasing by 12% and 57%, respectively. Overall, the company's net sales rose by 15% compared to the previous year, with organic growth at 4%, driven by Quest's performance. Adjusted EBITDA also saw an 18% increase. For the full fiscal year 2025, the company expects net sales to rise between 8.5% to 10.5% and adjusted EBITDA to grow by 4% to 6%. They maintain a strong emphasis on innovation, distribution expansion, and brand awareness, particularly for Quest, now accounting for 60% of net sales. Additionally, the company aims to manage challenges associated with tariffs and inflation, while leveraging productivity initiatives to support long-term growth.

Simply Good Foods Corporate Events

Executive/Board ChangesShareholder Meetings
Simply Good Foods Announces Leadership Changes and Approvals
Neutral
Jan 28, 2025

The Simply Good Foods Company announced the retirement of its Chief Financial Officer, Shaun P. Mara, effective July 3, 2025. Christopher J. Bealer has been appointed as Senior Vice President of Finance and is expected to succeed Mara. Bealer, who brings extensive experience from leading companies, will join the company on April 1, 2025. Additionally, the company held its 2025 Annual Meeting of Stockholders on January 23, 2025, where all proposed matters, including the election of directors and executive compensation, were approved.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.