Sprouts Farmers Market operates as a specialty retailer of fresh, natural, and organic food in the United States. The company was founded in 2002 and is based in Phoenix, Arizona.
SFM Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Sprouts Farmers Market Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Sprouts Farmers Market Inc ranked in the 82th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 681.17% on a DCF basis. In terms of the factors that were most noteworthy in this DCF analysis for SFM, they are:
The company's debt burden, as measured by earnings divided by interest payments, is 15.88 -- which is good for besting 82.94% of its peer stocks (US stocks in the Consumer Defensive sector with positive cash flow).
Sprouts Farmers Market Inc's weighted average cost of capital (WACC) is 7%; for context, that number is higher than only 3.39% of tickers in our DCF set.
SFM's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than only 3.39% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
SPTN, BRFS, BTI, VGR, and NGVC can be thought of as valuation peers to SFM, in the sense that they are in the Consumer Defensive sector and have a similar price forecast based on DCF valuation.
Arizona has a few statewide grocery chains aiming to be environmentally and community friendly with its unsellable food products. We’re talking about the big boys: Sprouts Farmers Market, Fry’s Food Stores, and Bashas’.
In the midst of a history-making pandemic is probably not the best time to go on a C-suite hiring spree. But that's exactly what Jack Sinclair did as he knocked out his first year as CEO of Sprouts Farmers Market (SFM). On June 20th, 2019, the natural and organic grocer...
Sprouts Farmers Market, Inc. (SFM) has been on a roll since revenues and earnings spiked in Q1-20 on the back of buyers' habits at the start of the pandemic in late March this year. Q2-20 results showed similar gains, and SFM is now trading at nearly 30% higher on a...
Beulah Meriam K on Seeking Alpha | August 13, 2020
Sprouts Farmers (SFM) reports better-than-expected second-quarter results, wherein both net sales and earnings per share increase year over year. The company benefits from coronavirus-led demand spike.