Freshpet, Inc. (NASDAQ:FRPT) Analysts Are Pretty Bullish On The Stock After Recent Results

The investors in Freshpet, Inc.'s (NASDAQ:FRPT) will be rubbing their hands together with glee today, after the share price leapt 23% to US$110 in the week following its annual results. Revenues of US$767m arrived in line with expectations, although statutory losses per share were US$0.70, an impressive 29% smaller than what broker models predicted. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Freshpet

Taking into account the latest results, the current consensus from Freshpet's 17 analysts is for revenues of US$955.0m in 2024. This would reflect a sizeable 25% increase on its revenue over the past 12 months. Earnings are expected to improve, with Freshpet forecast to report a statutory profit of US$0.17 per share. Before this earnings announcement, the analysts had been modelling revenues of US$945.5m and losses of US$0.30 per share in 2024. Although we saw no serious change to the revenue outlook, the analysts have definitely increased their earnings estimates, estimating a profit next year, compared to previous forecasts of a loss. So it seems like the consensus has become substantially more bullish on Freshpet.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 23% to US$113. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Freshpet analyst has a price target of US$130 per share, while the most pessimistic values it at US$68.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 25% growth on an annualised basis. That is in line with its 28% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 2.5% per year. So it's pretty clear that Freshpet is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that there's been a clear step-change in belief around the business' prospects, with the analysts now expecting Freshpet to become profitable next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Freshpet. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Freshpet going out to 2026, and you can see them free on our platform here..

You can also see whether Freshpet is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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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.