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Freshpet (FRPT - Free Report) , a Zacks Rank #1 (Strong Buy), is a pet food company that manufactures, distributes, and markets meals and treats for dogs and cats. Renewed strength in the consumer staples sector provides a durable backing for this industry leader. Freshpet shares have begun to display relative strength, recently surging to 52-week highs. Increasing volume has attracted investor attention as buying pressure accumulates in this top-ranked stock.
Freshpet is part of the Zacks Food – Miscellaneous industry group, which currently ranks in the top 43% out of more than 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months.
This industry contains stocks that are currently undervalued based on traditional metrics:
Image Source: Zacks Investment Research
Quantitative research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Company Description
Freshpet provides a variety of natural foods and refrigerated meals in the United States, Canada, and Europe. The company offers meat-based products such as chicken and beef; vegetable products such as carrots and leafy greens; and high-fiber products such as brown rice and oats.
The pet food retailer prides itself on high quality proteins and farm-fresh fruits and vegetables. Their healthy meals are steam-cooked, locking in vital nutrients as opposed to other cooking methods. Under the oversight of their veterinary nutritionists, Freshpet ensures its meals are prepared according to the highest food safety standards.
The Secaucus, New Jersey-based company sells its products under the Freshpet, Dognation, and Dog Joy labels through various retail channels including grocery, mass, club, pet specialty, as well as online.
Earnings Trends and Future Estimates
Freshpet has put together an impressive earnings history, surpassing earnings estimates in each of the last four quarters. Back in May, the company reported first-quarter earnings of $0.21/share, a 195.5% surprise over the -$0.22/share consensus estimate. Freshpet has delivered a trailing four-quarter average earnings surprise of 118.2%.
FRPT stock received a boost as analysts covering the company have been increasing their 2024 earnings estimates lately. For the full year, earnings estimates have risen 45.95% in the past 60 days. The Zacks Consensus EPS Estimate now stands at $0.54/share, reflecting a potential growth rate of 177.1% relative to the prior year. Revenues are projected to climb 24.8% to $957.4 million.
Image Source: Zacks Investment Research
Let’s Get Technical
This market leader has seen its stock advance nearly 50% in 2024 alone. Only stocks that are in extremely powerful uptrends are able to experience this type of outperformance. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Image Source: StockCharts
Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping up. The stock has been making a series of 52-week highs this year, widely outperforming the major indices. With positive fundamental and technical indicators, FRPT stock is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Freshpet has recently witnessed positive revisions. As long as this trend remains intact (and Freshpet continues to deliver earnings beats), the stock will likely continue its bullish run this year.
Bottom Line
Freshpet is ranked favorably by our Zacks Style Scores, with a best-in-class ‘A’ rating in our Momentum category and a second-best ‘B’ rating in our Growth category. This indicates that FRPT stock is likely to continue its strong momentum based on a favorable combination of earnings and sales growth.
Backed by a top industry group and impressive history of earnings beats, it’s not difficult to see why this company is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix. The future looks bright for this highly-ranked, leading stock.
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Bull of the Day: Freshpet (FRPT)
Freshpet (FRPT - Free Report) , a Zacks Rank #1 (Strong Buy), is a pet food company that manufactures, distributes, and markets meals and treats for dogs and cats. Renewed strength in the consumer staples sector provides a durable backing for this industry leader. Freshpet shares have begun to display relative strength, recently surging to 52-week highs. Increasing volume has attracted investor attention as buying pressure accumulates in this top-ranked stock.
Freshpet is part of the Zacks Food – Miscellaneous industry group, which currently ranks in the top 43% out of more than 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months.
This industry contains stocks that are currently undervalued based on traditional metrics:
Image Source: Zacks Investment Research
Quantitative research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Company Description
Freshpet provides a variety of natural foods and refrigerated meals in the United States, Canada, and Europe. The company offers meat-based products such as chicken and beef; vegetable products such as carrots and leafy greens; and high-fiber products such as brown rice and oats.
The pet food retailer prides itself on high quality proteins and farm-fresh fruits and vegetables. Their healthy meals are steam-cooked, locking in vital nutrients as opposed to other cooking methods. Under the oversight of their veterinary nutritionists, Freshpet ensures its meals are prepared according to the highest food safety standards.
The Secaucus, New Jersey-based company sells its products under the Freshpet, Dognation, and Dog Joy labels through various retail channels including grocery, mass, club, pet specialty, as well as online.
Earnings Trends and Future Estimates
Freshpet has put together an impressive earnings history, surpassing earnings estimates in each of the last four quarters. Back in May, the company reported first-quarter earnings of $0.21/share, a 195.5% surprise over the -$0.22/share consensus estimate. Freshpet has delivered a trailing four-quarter average earnings surprise of 118.2%.
FRPT stock received a boost as analysts covering the company have been increasing their 2024 earnings estimates lately. For the full year, earnings estimates have risen 45.95% in the past 60 days. The Zacks Consensus EPS Estimate now stands at $0.54/share, reflecting a potential growth rate of 177.1% relative to the prior year. Revenues are projected to climb 24.8% to $957.4 million.
Image Source: Zacks Investment Research
Let’s Get Technical
This market leader has seen its stock advance nearly 50% in 2024 alone. Only stocks that are in extremely powerful uptrends are able to experience this type of outperformance. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Image Source: StockCharts
Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping up. The stock has been making a series of 52-week highs this year, widely outperforming the major indices. With positive fundamental and technical indicators, FRPT stock is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Freshpet has recently witnessed positive revisions. As long as this trend remains intact (and Freshpet continues to deliver earnings beats), the stock will likely continue its bullish run this year.
Bottom Line
Freshpet is ranked favorably by our Zacks Style Scores, with a best-in-class ‘A’ rating in our Momentum category and a second-best ‘B’ rating in our Growth category. This indicates that FRPT stock is likely to continue its strong momentum based on a favorable combination of earnings and sales growth.
Backed by a top industry group and impressive history of earnings beats, it’s not difficult to see why this company is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix. The future looks bright for this highly-ranked, leading stock.