Is There Now An Opportunity In Freshpet, Inc. (NASDAQ:FRPT)?

While Freshpet, Inc. (NASDAQ:FRPT) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the NASDAQGM, rising to highs of US$73.03 and falling to the lows of US$41.00. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Freshpet's current trading price of US$41.00 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Freshpet’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Freshpet

What's The Opportunity In Freshpet?

Great news for investors – Freshpet is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $66.60, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Freshpet’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

Can we expect growth from Freshpet?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. In the upcoming year, Freshpet's earnings are expected to increase by 63%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since FRPT is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on FRPT for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy FRPT. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

If you want to dive deeper into Freshpet, you'd also look into what risks it is currently facing. At Simply Wall St, we found 2 warning signs for Freshpet and we think they deserve your attention.

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.