NasdaqGS:SFM

Stock Analysis Report

Executive Summary

Sprouts Farmers Market, Inc., a healthy grocery store, provides fresh, natural, and organic food products in the United States.


Snowflake Analysis

Fair value with acceptable track record.


Similar Companies

Share Price & News

How has Sprouts Farmers Market's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SFM's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-0.1%

SFM

4.3%

US Consumer Retailing

9.4%

US Market


1 Year Return

-10.9%

SFM

12.1%

US Consumer Retailing

-6.8%

US Market

Return vs Industry: SFM underperformed the US Consumer Retailing industry which returned 12.9% over the past year.

Return vs Market: SFM underperformed the US Market which returned -8.1% over the past year.


Shareholder returns

SFMIndustryMarket
7 Day-0.1%4.3%9.4%
30 Day18.2%-1.8%-3.9%
90 Day7.0%-3.1%-16.5%
1 Year-10.9%-10.9%14.2%12.1%-4.8%-6.8%
3 Year-16.3%-16.3%44.0%34.8%23.4%15.2%
5 Year-42.5%-42.5%45.4%30.4%41.3%25.7%

Price Volatility Vs. Market

How volatile is Sprouts Farmers Market's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

30.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SFM ($19.23) is trading below our estimate of fair value ($27.21)

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 (15.3x) compared to the Consumer Retailing industry average (18.1x).

PE vs Market: SFM is poor value based on its PE Ratio (15.3x) compared to the US market (13.3x).


Price to Earnings Growth Ratio

PEG Ratio: SFM is poor value based on its PEG Ratio (6x)


Price to Book Ratio

PB vs Industry: SFM is overvalued based on its PB Ratio (3.9x) compared to the US Consumer Retailing industry average (1.3x).


Next Steps

Future Growth

How is Sprouts Farmers Market forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

2.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SFM's forecast earnings growth (2.5% per year) is above the savings rate (1.7%).

Earnings vs Market: SFM's earnings (2.5% per year) are forecast to grow slower than the US market (13.3% per year).

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

Revenue vs Market: SFM's revenue (6.5% per year) is forecast to grow slower than the US market (6.9% per year).

High Growth Revenue: SFM's revenue (6.5% 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 (17%).


Next Steps

Past Performance

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

6.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SFM has high quality earnings.

Growing Profit Margin: SFM's current net profit margins (2.7%) are lower than last year (3.1%).


Past Earnings Growth Analysis

Earnings Trend: SFM's earnings have grown by 6.7% 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 (-5.8%) over the past year, making it difficult to compare to the Consumer Retailing industry average (-2.9%).


Return on Equity

High ROE: SFM's Return on Equity (25.7%) is considered high.


Next Steps

Financial Health

How is Sprouts Farmers Market's financial position?


Financial Position Analysis

Short Term Liabilities: SFM's short term assets ($387.8M) do not cover its short term liabilities ($416.8M).

Long Term Liabilities: SFM's short term assets ($387.8M) do not cover its long term liabilities ($1.7B).


Debt to Equity History and Analysis

Debt Level: SFM's debt to equity ratio (92.4%) is considered high.

Reducing Debt: SFM's debt to equity ratio has increased from 37.3% to 92.4% over the past 5 years.

Debt Coverage: SFM's debt is well covered by operating cash flow (66%).

Interest Coverage: SFM's interest payments on its debt are well covered by EBIT (10.6x coverage).


Balance Sheet


Next Steps

Dividend

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


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 payouts.

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


Current Payout to Shareholders

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


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of SFM's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

2.6yrs

Average management tenure


CEO

Jack Sinclair (58yo)

0.83

Tenure

US$6,739,494

Compensation

Mr. Jack L. Sinclair has been Chief Executive Officer and a Member of board of director of Sprouts Farmers Market, Inc. Since June 24, 2019. He served as Chief Executive Officer of 99 Cents only Stores LLC ...


CEO Compensation Analysis

Compensation vs Market: Jack's total compensation ($USD6.74M) is above average for companies of similar size in the US market ($USD4.69M).

Compensation vs Earnings: Insufficient data to compare Jack's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Jack Sinclair
CEO & Director0.83yrUS$6.74mno data
Dan Sanders
Chief Operations Officer3.5yrsUS$1.08m0.026% $580.4k
Brandon Lombardi
Chief Human Resources & Legal Officer and Corporate Secretary8.25yrsUS$1.13m0.011% $253.3k
David McGlinchey
Chief Format Officer1.67yrsUS$1.11m0.0069% $154.3k
Denise Paulonis
CFO & Treasurer0.17yrno datano data
Daniel Bruni
Chief Information Officer5.17yrsUS$669.48kno data
Susannah Livingston
Vice President of Investor Relations & Treasuryno dataUS$321.36kno data

2.6yrs

Average Tenure

52.5yo

Average Age

Experienced Management: SFM's management team is considered experienced (2.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jack Sinclair
CEO & Director0.83yrUS$6.74mno data
Lawrence Molloy
Independent Director7.25yrsUS$2.07m0.037% $821.0k
Joseph Fortunato
Independent Non-Executive Chairman3.17yrsUS$240.17k0.018% $393.5k
Terri Graham
Independent Director6.92yrsUS$230.17k0.015% $345.9k
Joel Anderson
Independent Director0.42yrUS$63.88k0.0089% $197.6k
Joseph O'Leary
Independent Director2.5yrsUS$200.17k0.0058% $130.2k
Douglas Rauch
Independent Director0.17yrno datano data
Kristen Blum
Independent Director3.67yrsUS$210.17k0.014% $322.7k

2.8yrs

Average Tenure

58yo

Average Age

Experienced Board: SFM's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


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.


Top Shareholders

Company Information

Sprouts Farmers Market, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Sprouts Farmers Market, Inc.
  • Ticker: SFM
  • Exchange: NasdaqGS
  • Founded: 2002
  • Industry: Food Retail
  • Sector: Consumer Retailing
  • Market Cap: US$2.233b
  • Shares outstanding: 117.54m
  • Website: https://www.sprouts.com

Number of Employees


Location

  • Sprouts Farmers Market, Inc.
  • 5455 East High Street
  • Suite 111
  • Phoenix
  • Arizona
  • 85054
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SFMNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDAug 2013
1FADB (Deutsche Boerse AG)YesCommon StockDEEURAug 2013
1FABRSE (Berne Stock Exchange)YesCommon StockCHCHFAug 2013

Biography

Sprouts Farmers Market, Inc., a healthy grocery store, provides fresh, natural, and organic food products in the United States. Its stores offer fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, baked goods, dairy products, frozen foods, beer and wine, natural body care and household items. As of February 20, 2020, it operated 341 stores in 22 states. Sprouts Farmers Market, Inc. was founded in 2002 and is based in Phoenix, Arizona. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/10 09:10
End of Day Share Price2020/04/09 00:00
Earnings2019/12/29
Annual Earnings2019/12/29


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.