Freshpet, Inc. (NASDAQ:FRPT) Second-Quarter Results: Here's What Analysts Are Forecasting For This Year

It's been a good week for Freshpet, Inc. (NASDAQ:FRPT) shareholders, because the company has just released its latest quarterly results, and the shares gained 5.4% to US$128. Revenues of US$235m arrived in line with expectations, although statutory losses per share were US$0.03, 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Freshpet

Following the latest results, Freshpet's 19 analysts are now forecasting revenues of US$967.9m in 2024. This would be a decent 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 33% to US$0.69. Before this earnings report, the analysts had been forecasting revenues of US$960.8m and earnings per share (EPS) of US$0.73 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at US$142, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Freshpet analyst has a price target of US$175 per share, while the most pessimistic values it at US$88.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. We can infer from the latest estimates that forecasts expect a continuation of Freshpet'shistorical trends, as the 22% annualised revenue growth to the end of 2024 is roughly in line with the 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 3.1% 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 the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$142, with the latest estimates not enough to have an impact on their price targets.

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. We have estimates - from multiple Freshpet analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Freshpet that you should be aware of.

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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.