Sprouts Farmers Market (NasdaqGS:SFM) - Share price, News & Analysis

SFM fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	2/6
Past Performance	3/6
Financial Health	5/6
Dividends	0/6

SFM Stock Overview

Sprouts Farmers Market, Inc. offers fresh, natural, and organic food products in the United States.

Rewards

Trading at 70.5% below our estimate of its fair value

Earnings are forecast to grow 3.59% per year

Risk Analysis

Significant insider selling over the past 3 months

Sprouts Farmers Market Competitors

Kroger

NYSE:KR

US$35.1b

Weis Markets

NYSE:WMK

US$2.0b

Ingles Markets

NasdaqGS:IMKT.A

US$1.6b

Natural Grocers by Vitamin Cottage

NYSE:NGVC

US$364.9m

Price History & Performance

Summary of all time highs, changes and price drops for Sprouts Farmers Market
Historical stock prices
Current Share Price	US$23.51
52 Week High	US$35.34
52 Week Low	US$21.18
Beta	0.37
1 Month Change	-24.98%
3 Month Change	-19.27%
1 Year Change	-8.88%
3 Year Change	14.40%
5 Year Change	-1.88%
Change since IPO	-41.20%

Recent News & Updates

May 03

Sprouts Farmers Market: A Stock For A High Inflation Environment

Inflation has been reaching elevated levels in most goods around the world, with food being no exception. Sprouts Farmers Market's customer base and product line should both be quite robust to the effects of inflation. The company has posted good results, even excluding the one-time tailwind from COVID purchasing patterns, but its valuation has not kept pace.

Shareholder Returns

	SFM	US Consumer Retailing	US Market
7D	-5.7%	-16.0%	-2.7%
1Y	-8.9%	-6.8%	-12.9%

Return vs Industry: SFM underperformed the US Consumer Retailing industry which returned -6.8% over the past year.

Return vs Market: SFM exceeded the US Market which returned -12.9% over the past year.

Price Volatility

Is SFM's price volatile compared to industry and market?
SFM volatility
SFM Average Weekly Movement	9.3%
Consumer Retailing Industry Average Movement	7.2%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	2.9%

Stable Share Price: SFM is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: SFM's weekly volatility (9%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2002	31,000	Jack Sinclair	https://www.sprouts.com

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 Fundamentals Summary

How do Sprouts Farmers Market's earnings and revenue compare to its market cap?
SFM fundamental statistics
Market Cap	US$2.58b
Earnings (TTM)	US$249.42m
Revenue (TTM)	US$6.17b

10.3x

P/E Ratio

0.4x

P/S Ratio

Is SFM overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SFM income statement (TTM)
Revenue	US$6.17b
Cost of Revenue	US$3.92b
Gross Profit	US$2.25b
Other Expenses	US$2.00b
Earnings	US$249.42m

Last Reported Earnings

Apr 03, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.28
Gross Margin	36.42%
Net Profit Margin	4.05%
Debt/Equity Ratio	24.9%

How did SFM perform over the long term?

See historical performance and comparison

Valuation

Is Sprouts Farmers Market undervalued compared to its fair value and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: SFM ($23.51) is trading below our estimate of fair value ($79.61)

Significantly Below Fair Value: SFM is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: SFM is good value based on its PE Ratio (10.3x) compared to the US Consumer Retailing industry average (17x).

PE vs Market: SFM is good value based on its PE Ratio (10.3x) compared to the US market (15.2x).

Price to Earnings Growth Ratio

PEG Ratio: SFM is poor value based on its PEG Ratio (2.9x)

Price to Book Ratio

PB vs Industry: SFM is overvalued based on its PB Ratio (2.5x) compared to the US Consumer Retailing industry average (1.9x).

Future Growth

How is Sprouts Farmers Market forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

3.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SFM's forecast earnings growth (3.6% per year) is above the savings rate (1.9%).

Earnings vs Market: SFM's earnings (3.6% per year) are forecast to grow slower than the US market (12.5% per year).

High Growth Earnings: SFM's earnings are forecast to grow, but not significantly.

Revenue vs Market: SFM's revenue (7.9% per year) is forecast to grow faster than the US market (7.8% per year).

High Growth Revenue: SFM's revenue (7.9% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: SFM's Return on Equity is forecast to be low in 3 years time (18.9%).

Past Performance

How has Sprouts Farmers Market performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

15.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SFM has high quality earnings.

Growing Profit Margin: SFM's current net profit margins (4%) are lower than last year (4.4%).

Past Earnings Growth Analysis

Earnings Trend: SFM's earnings have grown by 15.7% per year over the past 5 years.

Accelerating Growth: SFM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SFM had negative earnings growth (-10.5%) over the past year, making it difficult to compare to the Consumer Retailing industry average (6.6%).

Return on Equity

High ROE: SFM's Return on Equity (24.6%) is considered high.

Financial Health

How is Sprouts Farmers Market's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: SFM's short term assets ($640.7M) exceed its short term liabilities ($523.7M).

Long Term Liabilities: SFM's short term assets ($640.7M) do not cover its long term liabilities ($1.5B).

Debt to Equity History and Analysis

Debt Level: SFM has more cash than its total debt.

Reducing Debt: SFM's debt to equity ratio has reduced from 44.3% to 24.9% over the past 5 years.

Debt Coverage: SFM's debt is well covered by operating cash flow (163.8%).

Interest Coverage: SFM's interest payments on its debt are well covered by EBIT (29.3x coverage).

Balance Sheet

Dividend

What is Sprouts Farmers Market current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate SFM's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate SFM's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if SFM's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SFM's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as SFM has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure

CEO

Jack Sinclair (60 yo)

2.92yrs

Tenure

US$5,773,120

Compensation

Mr. Jack L. Sinclair has been Chief Executive Officer and Director of Sprouts Farmers Market, Inc. since June 24, 2019. Mr. Sinclair has served as a board member of FMI – The Food Industry Association sinc...

CEO Compensation Analysis

Compensation vs Market: Jack's total compensation ($USD5.77M) is about average for companies of similar size in the US market ($USD6.86M).

Compensation vs Earnings: Jack's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: SFM's management team is considered experienced (2.1 years average tenure).

Board Members

Experienced Board: SFM's board of directors are considered experienced (4.6 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: SFM insiders have sold more shares than they have bought in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/22 00:00
End of Day Share Price	2022/05/20 00:00
Earnings	2022/04/03
Annual Earnings	2022/01/02