Is It Time to Reconsider United Natural Foods After Its 2025 Rally and Recent Pullback

• Wondering if United Natural Foods is still a bargain after its big run over the years, or if you have missed the boat? This breakdown will help you decide whether UNFI deserves a spot on your watchlist right now.
• Despite a recent pullback, with the stock down 8.6% over the last week and 7.6% over the last month, United Natural Foods is still up 23.6% year to date and 41.7% over the past year. This hints that sentiment has shifted meaningfully.
• Investors have been reacting to ongoing efforts by United Natural Foods to streamline operations and manage its leverage, as well as strategic moves to deepen relationships with key grocery and natural food retailers. At the same time, broader shifts in consumer demand toward value oriented and private label products have added another layer of interest to the stock's recent moves.
• On our checks, United Natural Foods scores a 5/6 valuation score, suggesting it still screens as undervalued on most traditional metrics. Next, we will unpack those different valuation approaches, before closing with a more holistic way to think about what UNFI might really be worth.

United Natural Foods delivered 41.7% returns over the last year. See how this stacks up to the rest of the Consumer Retailing industry.

Approach 1: United Natural Foods Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting the cash it can generate in the future, then discounting those dollars back to today to account for risk and the time value of money.

For United Natural Foods, the model uses last twelve month Free Cash Flow of about $253.7 Million as a starting point and a 2 Stage Free Cash Flow to Equity approach. Analyst forecasts underpin nearer term estimates, such as projected FCF of roughly $394.4 Million in 2026 and rising to about $557 Million by 2030. After that point, Simply Wall St extrapolates more modest growth further out.

When all those future cash flows are discounted back to today, the DCF model arrives at an intrinsic value of roughly $125.72 per share. Based on this estimate, the stock screens as about 72.9% undervalued relative to its current trading price. This suggests the market is heavily discounting United Natural Foods cash generation potential.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests United Natural Foods is undervalued by 72.9%. Track this in your watchlist or portfolio, or discover 907 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for United Natural Foods.

Approach 2: United Natural Foods Price vs Sales

For businesses like United Natural Foods that operate on thin margins and can see earnings swing with factors such as fuel, freight and contract timing, the Price to Sales ratio is often a cleaner way to compare value. It focuses on how much investors are paying for each dollar of revenue, which tends to be more stable than short term profits and therefore useful when earnings are volatile or depressed.

In general, higher growth and lower risk justify a higher multiple, while slower growth and greater uncertainty call for a discount. United Natural Foods currently trades on a Price to Sales ratio of about 0.07x, which is far below the Consumer Retailing industry average of roughly 0.39x and also well under the broader peer group at around 0.73x. Simply Wall St goes a step further by estimating a Fair Ratio of about 0.16x, which reflects company specific factors such as revenue growth prospects, margins, risk profile, industry positioning and market cap. Because this Fair Ratio is tailored to United Natural Foods fundamentals rather than simple comparisons, it offers a more nuanced benchmark. With the current 0.07x multiple sitting well below the 0.16x Fair Ratio, the shares appear attractively valued on a sales basis.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1443 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your United Natural Foods Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simple stories that connect your view of a company, like your assumptions for United Natural Foods future revenue, earnings and margins, to a concrete financial forecast and a fair value estimate. Narratives on Simply Wall St, available to millions of investors on the Community page, turn the numbers into something intuitive by tying the company’s strategic direction, risks and competitive position to a set of forecast assumptions, then translating those assumptions into a Fair Value you can easily compare to today’s share price to help you evaluate whether you might want to buy, hold or sell. Because Narratives are updated dynamically when new data arrives, from earnings to news about cyber risks or major contracts, they stay relevant and living instead of static. For United Natural Foods, for instance, some investors may build a bullish Narrative that leans into operational efficiencies, modest revenue growth near 1.5 percent and a future PE closer to 18.4x that supports a fair value around $40 per share. More cautious investors might instead stress cyber and competitive risks, assume lower earnings and margins, and arrive at a fair value closer to $24. This shows how different but clearly structured stories can coexist and help you decide which one you believe.

Do you think there's more to the story for United Natural Foods? Head over to our Community to see what others are saying!

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com