Results: Freshpet, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

Explore Freshpet's Fair Values from the Community and select yours

It's been a mediocre week for Freshpet, Inc. (NASDAQ:FRPT) shareholders, with the stock dropping 10% to US$63.69 in the week since its latest quarterly results. It looks like a credible result overall - although revenues of US$265m were what the analysts expected, Freshpet surprised by delivering a (statutory) profit of US$0.33 per share, an impressive 264% above what was forecast. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Following the latest results, Freshpet's 18 analysts are now forecasting revenues of US$1.12b in 2025. This would be an okay 6.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 54% to US$1.06. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.12b and earnings per share (EPS) of US$0.84 in 2025. Although the revenue estimates have not really changed, we can see there's been a very substantial lift in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

Check out our latest analysis for Freshpet

There's been no major changes to the consensus price target of US$95.25, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. There are some variant perceptions on Freshpet, with the most bullish analyst valuing it at US$158 and the most bearish at US$65.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Freshpet's revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2025 being well below the historical 26% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.9% annually. So it's pretty clear that, while Freshpet's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Freshpet's earnings potential next year. 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$95.25, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Freshpet going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Freshpet you should know about.

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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.