Sprouts Farmers Market (SFM): Assessing Valuation After Buyback Launch and Robust Growth Despite Recent Stake Sale

Sprouts Farmers Market (SFM) saw Bearing Point Capital trim its holdings during the last quarter. The company posted higher revenue, same-store sales, and earnings per share, while announcing a new $1 billion share repurchase plan.

See our latest analysis for Sprouts Farmers Market.

Sprouts Farmers Market’s share price has been under heavy pressure recently, falling nearly 27% in the past month and down 38% year-to-date, even as management reported solid operational growth and initiated a substantial share buyback. The negative price momentum has weighed on short-term total returns, but long-term shareholders have still enjoyed a 149% total return over three years and a remarkable 308% over five years. This underscores the company’s underlying resilience despite the current volatility.

If Sprouts’ mix of operational progress and rapid price swings has you curious, now’s the perfect opportunity to broaden your investing horizons and discover fast growing stocks with high insider ownership

So with recent gains in sales and earnings running up against a sharp drop in the share price, is Sprouts Farmers Market trading at a compelling discount, or is the market already factoring in future growth?

Most Popular Narrative: 33% Undervalued

According to tripledub’s widely-followed narrative, Sprouts Farmers Market’s fair value sits well above the latest closing price. The community is laser-focused on whether recent operational and margin gains can fuel sustained outperformance and unlock further upside.

The specialty grocer's 455 stores are capturing market share with blistering 10.9% comparable store sales growth. Its zero-debt balance sheet and $410M in H1 2025 operating cash flow ($580M+ annualized) provide ammunition for aggressive expansion. With a pipeline of more than 35 new stores annually and private label penetration at just 24% (compared to Trader Joe's 80%), Sprouts has significant runway.

Read the complete narrative.

Want to know what’s powering this head-turning valuation? It all comes down to bold estimates for sales expansion, huge bets on new store rollouts, and a strategic plan to overhaul the business mix. How high could operating margins and private label share go? Discover the detailed blueprint driving this thesis and see the numbers that set it apart.

Result: Fair Value of $122 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, slowing same-store sales and tough competition from traditional grocers could present challenges to Sprouts’ growth story and test management’s ambitious plans.

Find out about the key risks to this Sprouts Farmers Market narrative.

Build Your Own Sprouts Farmers Market Narrative

If you see Sprouts’ story differently or want to put your own perspective to the test, you can easily craft and share your own analysis in just a few minutes. Do it your way

A great starting point for your Sprouts Farmers Market research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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