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Sprouts Farmers (SFM) Gains As Market Dips: What You Should Know

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In the latest trading session, Sprouts Farmers (SFM - Free Report) closed at $23.60, marking a +1.61% move from the previous day. This change outpaced the S&P 500's 2.59% loss on the day. Elsewhere, the Dow lost 2.72%, while the tech-heavy Nasdaq lost 2.19%.

Investors will be hoping for strength from SFM as it approaches its next earnings release. On that day, SFM is projected to report earnings of $0.37 per share, which would represent year-over-year growth of 23.33%. Our most recent consensus estimate is calling for quarterly revenue of $1.58 billion, up 11.25% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.67 per share and revenue of $6.35 billion, which would represent changes of +33.6% and +12.63%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for SFM. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.88% higher. SFM is holding a Zacks Rank of #1 (Strong Buy) right now.

Looking at its valuation, SFM is holding a Forward P/E ratio of 13.91. For comparison, its industry has an average Forward P/E of 14.45, which means SFM is trading at a discount to the group.

Also, we should mention that SFM has a PEG ratio of 1.51. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Food - Natural Foods Products was holding an average PEG ratio of 4.09 at yesterday's closing price.

The Food - Natural Foods Products industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 30, putting it in the top 12% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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