One-glance verdict
Undervalued
$99.92 our estimate vs market $81.40
Wall Street consensus: $95.00 (-4.9% lower than our fair-value estimate)
19% below our estimate, below the bear case
Fundamentals snapshot
Sprouts Farmers Market, Inc.
SFM · NMS · Consumer Defensive · Grocery Stores
Current price
$81.40
52-week range
$64.75 - $140.12
Market cap
$7.59B
Balance sheet
Stretched
391.03x Strong cushion
Net debt $1.88B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 2.2% last year.
- Reward Returns 35.2% on equity, ahead of 83% of its peers.
- Risk Net debt grew 35.2% over 3 years.
- Risk Insider ownership is only 0.6% (peer median: 13.6%).
What this company does
Sprouts Farmers Market, Inc.
Sprouts Farmers Market is a grocery store chain that focuses on selling fresh, natural, and organic foods to health-conscious shoppers. The company makes its money primarily from selling perishable items like produce and meat, which helps it stand out from larger, traditional supermarkets. This specialized strategy is important because it can attract very loyal customers and potentially earn higher profit margins (the percentage of profit made from each dollar of sales) than its competitors.
How the company got here
Sprouts Farmers Market began in 2002 in Chandler, Arizona, started by the Boney family, who had a long history in the grocery business. Their goal was to make natural and organic foods affordable and accessible to more people, unlike the expensive specialty stores or limited options elsewhere. The company grew by combining with other similar grocery chains, like Henry's Farmers Market and Sunflower Farmers Market, which helped it expand more quickly. In 2013, Sprouts became a public company, meaning its stock is now traded on the NASDAQ stock exchange.
What it actually does
Sprouts is a grocery store chain that feels like an indoor farmers market, focusing on fresh, natural, and organic foods. It's known for having a large produce section right in the center of the store, offering a wide variety of fruits and vegetables. The company aims to sell products that are minimally processed and free of artificial ingredients. Shoppers go to Sprouts for healthy food options, including items that cater to specific diets like plant-based or gluten-free, as well as vitamins and supplements.
Grocery Retail
This is the company's single and primary business. Sprouts makes money by selling food and wellness products directly to shoppers in its physical stores. Its main draw is perishable goods, especially fresh produce, which makes up a large portion of its sales. The stores also sell packaged groceries, meat, seafood, bulk foods (like nuts and grains sold by weight), vitamins, and body care products. Sprouts focuses on a smaller store size and a carefully selected product mix to keep prices competitive and attract health-conscious customers.
What management is betting on now
The company's leadership is focused on disciplined growth by opening dozens of new, smaller-format stores, primarily in existing markets where the brand is already known. They are also working to improve their supply chain (the system of getting products from suppliers to the stores) by handling more of their own distribution for fresh products like meat and produce. Another key priority is increasing customer engagement through a new loyalty program and expanding their own private-label products (items with the Sprouts brand on them). The strategy aims to attract more health-focused shoppers and encourage them to visit more often and spend more each time.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$156.29M
FY2024 Q4
$56.17M
FY2025 Q1
$239.61M
FY2025 Q2
$50.41M
FY2025 Q3
$111.37M
FY2025 Q4
$66.34M
FY2026 Q1
$134.14M
FY2026 Q2
$44.95M
Revenue
$2.33B
Net income
$129.19M
Diluted EPS
1.37
Operating cash flow
$133.71M
Free cash flow
$44.95M
Fetching…
Sources
Revenue
$2.33B
Net income
$163.72M
Diluted EPS
1.71
Operating cash flow
$235.29M
Free cash flow
$134.14M
Fetching…
Sources
Revenue
$2.15B
Net income
$89.83M
Diluted EPS
0.93
Operating cash flow
$138.53M
Free cash flow
$66.34M
Fetching…
Sources
Revenue
$2.20B
Net income
$120.12M
Diluted EPS
1.22
Operating cash flow
$167.13M
Free cash flow
$111.37M
Fetching…
Sources
Revenue
$2.22B
Net income
$133.70M
Diluted EPS
1.35
Operating cash flow
$111.25M
Free cash flow
$50.41M
Fetching…
Sources
Revenue
$2.24B
Net income
$180.03M
Diluted EPS
1.81
Operating cash flow
$299.09M
Free cash flow
$239.61M
Fetching…
Sources
Revenue
$2.00B
Net income
$79.60M
Diluted EPS
0.78
Operating cash flow
$124.86M
Free cash flow
$56.17M
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Sources
Revenue
$1.95B
Net income
$91.61M
Diluted EPS
0.91
Operating cash flow
$209.06M
Free cash flow
$156.29M
Fetching…
Sources
Is it cheap or expensive?
Fair value $99.92 vs current price $81.40
Wall Street consensus is the average analyst price target: $95.00 (-4.9% lower than our fair-value estimate).
Our most-likely fair value is $99.92 a share — about 22.8% above today's price of $81.40, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $1.9B. Interest coverage 391.0x.
Net debt
$1.88B
Interest coverage
391.03x
Sprouts Farmers Market, Inc.'s profit covers its interest bill about 391.0 times over. which is stronger than every peer shown here.
Stretched
Worse cushion
Baseline
Better cushion
SFM
BASELINE
Sprouts Farmers Market, Inc.
Total debt $2.11B Interest coverage 391.03x This is the baseline the peer rows are being compared against.
Total debt $322.68M Interest coverage 20.58x -95% vs SFM Carries about 19.0x less debt cushion than SFM.
Total debt $1.85B Interest coverage 2.76x -99% vs SFM Carries about 141.5x less debt cushion than SFM.
Total debt $647.80M Interest coverage 7.39x -98% vs SFM Carries about 52.9x less debt cushion than SFM.
Total debt $320.28M Interest coverage 15.52x -96% vs SFM Carries about 25.2x less debt cushion than SFM.
What you should know
The case for and against SFM
3 Rewards
2 Risks
Rewards
-
Revenue grew 2.2% last year.
-
Returns 35.2% on equity, ahead of 83% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Net debt grew 35.2% over 3 years.
-
Insider ownership is only 0.6% (peer median: 13.6%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
15.56x
Forward P/E
13.65x
P/B
5.20x
P/S
0.84x
EV/EBITDA
11.24x
PEG ratio
1.70x
Profitability
How much profit each dollar creates
Gross margin
38.9%
Operating margin
7.5%
Net margin
5.6%
ROE
35.2%
ROA
10.3%
Health
Liquidity and balance-sheet strength
Debt / equity
1.40x
Current ratio
0.99x
Quick ratio
0.37x
Total debt
$2.11B
Total cash
$223.93M
Growth
How the business has been compounding
Revenue TTM
$9.00B
Revenue 5Y CAGR
9.6%
EPS TTM
5.23
EPS 5Y CAGR
30.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$674.66M
Free CF TTM
$467.73M
FCF margin
5.2%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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