Sprouts Farmers Market, Inc. (SFM)
Consumer Defensive · NMS · US
Fundamentals
Valuation and ratings
Sprouts Farmers Market, Inc. trades at USD73.67, which is 40% above the USD44.29 our discounted cash flow model puts on the business. On that measure it screens as expensive, which is not the same as saying it will fall.
Our moat model scores it 53 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 14.5 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Sprouts Farmers Market, Inc.
Sprouts Farmers Market, Inc., together with its subsidiaries, engages in the retailing of fresh, natural, and organic food products in the United States. The company offers healthy grocery stores; and lifestyle-friendly ingredients such as organic, plant-based, keto, paleo, non-GMO, and gluten-free. The company also offers perishable product categories, including produce, meat and meat alternatives, seafood, deli, bakery, floral, and dairy alternatives; and non-perishable product categories, such as grocery, vitamins and supplements, bulk items, frozen foods, beer and wine, and natural health and body care. It sells its products under the Sprouts brand. The company was founded in 1943 and is headquartered in Phoenix, Arizona.
Smart money ownership
5 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Renaissance Technologies, RENAISSANCE TECHNOLOGIES LLC$187.99M · 0.3% of book
- Cliff Asness, AQR CAPITAL MANAGEMENT LLC$146.76M · 0.1% of book
- Philippe Laffont, COATUE MANAGEMENT LLC$92.85M · 0.3% of book
- Marshall Wace, MARSHALL WACE, LLP$38.44M · 0.0% of book
- Steve Cohen, Point72 Asset Management, L.P.$37.74M · 0.1% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Sprouts Farmers Market, Inc. (SFM) undervalued?
Against our discounted cash flow estimate of USD44.29, SFM at USD73.67 is 40% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own SFM?
5 of the institutions we track reported a position in SFM in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is SFM's P/E ratio?
SFM trades at 14.5 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.