Is Now An Opportune Moment To Examine Freshpet, Inc. (NASDAQ:FRPT)?

While Freshpet, Inc. (NASDAQ:FRPT) might not have the largest market cap around , it saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGM. The recent share price gains has brought the company back closer to its yearly peak. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine Freshpet’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Freshpet

Is Freshpet Still Cheap?

According to our valuation model, Freshpet seems to be fairly priced at around 14.10% above our intrinsic value, which means if you buy Freshpet today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $118.51, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Freshpet’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Freshpet look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Freshpet's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in FRPT’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on FRPT, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Freshpet, you'd also look into what risks it is currently facing. You'd be interested to know, that we found 1 warning sign for Freshpet and you'll want to know about it.

If you are no longer interested in Freshpet, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.