Sprouts Farmers (SFM) AI Stock Analysis

• Market Cap: $10.70B
• Dividend Yield: N/A
• Average Volume (3M): 1.96M
• Price to Earnings (P/E): 22.4
• Beta (1Y): 0.52
• Revenue Growth: 16.83%
• EPS Growth: 52.71%
• Country: US
• Employees: 35,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Grocery Stores
• EPS (TTM): 1.35
• Shares Outstanding: 97,726,166
• 10 Day Avg. Volume: 2,576,015
• 30 Day Avg. Volume: 1,964,626
• PEG Ratio: 0.67
• Price to Book (P/B): 9.67
• Price to Sales (P/S): 1.66
• P/FCF Ratio: 30.80
• Enterprise Value/Market Cap: 1.64
• Enterprise Value/Revenue: 2.08
• Enterprise Value/Gross Profit: 5.39
• Enterprise Value/Ebitda: 18.88
• 1Y Price Target: $180.18
• Price Target Upside: 65.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 72 Outperform
• Price Target: $122.00 ▲(12.13% Upside)

Sprouts Farmers Market's overall stock score is driven by strong financial performance and a positive earnings call, indicating robust growth and strategic expansion. However, technical analysis shows bearish momentum, and the valuation suggests the stock may be overvalued. The absence of corporate events does not impact the score.

Positive Factors

Revenue Growth

The 17% increase in total sales indicates strong market demand and effective business strategies, supporting long-term growth potential.

E-commerce Expansion

Significant growth in e-commerce sales shows adaptability to consumer trends and enhances revenue diversification, crucial for future competitiveness.

Gross Margin Improvement

Improved gross margins reflect efficient cost management and pricing strategies, which bolster profitability and financial health over time.

Negative Factors

Reliance on Debt

Reliance on debt financing can increase financial risk and limit flexibility, potentially impacting long-term sustainability if not managed carefully.

Store Closure Costs

Costs associated with store closures can strain resources and indicate potential operational inefficiencies, affecting long-term profitability.

Industry Disruptions

Industry disruptions and traffic moderation suggest potential vulnerabilities in market conditions, which could hinder growth and operational stability.

Sprouts Farmers Business Overview & Revenue Model

Company Description

Sprouts Farmers Market (SFM) is a grocery retailer that specializes in providing fresh, natural, and organic products. Founded in 2004, the company operates a chain of stores across the United States, offering a wide range of products including fresh produce, bulk foods, vitamins and supplements, and specialty grocery items. Sprouts is known for its farmer's market-style shopping experience, emphasizing healthy living and sustainability.

How the Company Makes Money

Sprouts Farmers Market generates revenue primarily through the sale of grocery products in their retail stores. Key revenue streams include fresh produce, packaged groceries, vitamins and supplements, and prepared foods. The company benefits from a strong focus on organic and natural products, which often carry higher margins compared to conventional items. Additionally, Sprouts engages in promotional pricing and loyalty programs to drive sales. The company also leverages partnerships with local farmers and suppliers to enhance product offerings and appeal to health-conscious consumers. Seasonal promotions and community events further contribute to customer engagement and sales growth.

Sprouts Farmers Financial Statement Overview

Summary

Sprouts Farmers Market demonstrates strong financial performance with consistent revenue growth and robust profitability. The income statement is particularly strong, with a 4.05% revenue increase and a solid net profit margin of 5.77%. The balance sheet shows a manageable debt-to-equity ratio, though it indicates some reliance on debt. Cash flow is positive, with a healthy free cash flow to net income ratio, supporting sustainable operations.

Income Statement

Sprouts Farmers shows strong performance in the income statement with consistent revenue growth, evidenced by a 4.05% increase in TTM. The gross profit margin is robust at 38.69%, indicating efficient cost management. Net profit margin has improved to 5.77%, reflecting enhanced profitability. EBIT and EBITDA margins are healthy, supporting operational efficiency.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio of 1.29, which is manageable but indicates reliance on debt financing. Return on equity is impressive at 36.53%, showcasing effective use of shareholder funds. However, the equity ratio is relatively low, suggesting potential vulnerability to financial fluctuations.

Cash Flow

Cash flow analysis shows positive trends with a 3.39% growth in free cash flow, indicating strong cash generation capabilities. The operating cash flow to net income ratio is slightly above 1, demonstrating efficient conversion of income to cash. The free cash flow to net income ratio is healthy at 67.07%, supporting sustainable operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.40B	7.72B	6.84B	6.40B	6.10B	6.47B
Gross Profit	3.25B	2.94B	2.52B	2.35B	2.21B	2.38B
EBITDA	927.06M	785.79M	482.12M	604.76M	568.13M	617.45M
Net Income	484.94M	380.60M	258.86M	261.16M	244.16M	287.45M
Balance Sheet
Total Assets	3.78B	3.64B	3.33B	3.07B	2.92B	2.81B
Cash, Cash Equivalents and Short-Term Investments	261.40M	265.16M	201.79M	293.23M	245.29M	169.70M
Total Debt	1.76B	1.68B	1.66B	1.54B	1.51B	1.47B
Total Liabilities	2.43B	2.32B	2.18B	2.02B	1.96B	1.93B
Stockholders Equity	1.36B	1.32B	1.15B	1.05B	959.88M	881.29M
Cash Flow
Free Cash Flow	502.49M	414.84M	239.76M	247.32M	262.42M	372.07M
Operating Cash Flow	744.26M	645.21M	465.07M	371.33M	364.80M	494.04M
Investing Cash Flow	-241.77M	-230.38M	-238.34M	-124.01M	-102.38M	-121.97M
Financing Cash Flow	-418.46M	-351.50M	-318.05M	-199.13M	-186.86M	-287.41M

Sprouts Farmers Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 108.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SFM, the sentiment is Negative. The current price of 108.8 is below the 20-day moving average (MA) of 125.78, below the 50-day MA of 140.55, and below the 200-day MA of 151.46, indicating a bearish trend. The MACD of -9.23 indicates Positive momentum. The RSI at 13.84 is Positive, neither overbought nor oversold. The STOCH value of 5.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SFM.

Sprouts Farmers Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SFM	72 Outperform	$10.70B	22.42	36.94%	―	16.83%	52.71%
KR	65 Neutral	$44.02B	16.82	29.38%	1.94%	-2.13%	3.22%
NGVC	65 Neutral	$882.59M	20.47	21.56%	1.20%	8.51%	40.83%
ACI	60 Neutral	$9.79B	10.66	29.60%	3.26%	1.96%	-14.99%
GO	58 Neutral	$1.57B	202.40	0.69%	―	8.47%	-85.17%
IMKTA	52 Neutral	$1.29B	23.43	3.54%	0.95%	-7.96%	-64.67%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%

Sprouts Farmers Corporate Events

Sprouts Farmers Signs New Distribution Agreement

On September 3, 2025, Sprouts Farmers Market, Inc. entered into a new ten-year Distribution Agreement with KeHE Distributors, LLC, replacing their previous agreement from 2018. This agreement outlines the terms for product pricing, service levels, and distribution procedures, potentially impacting the company’s operational efficiency and market positioning.

Sprouts Farmers Approves $1 Billion Share Buyback

On August 13, 2025, Sprouts Farmers Market’s Board of Directors approved a new $1 billion share repurchase authorization, replacing the previous program with $143 million remaining. This initiative, reflecting the company’s strong cash flow and strategic confidence, aims to return excess cash to shareholders and may be adjusted based on market conditions and investment opportunities.

Sprouts Farmers Reports Strong Q2 2025 Financial Results

Sprouts Farmers Market reported strong financial results for the second quarter of 2025, with net sales reaching $2.2 billion, a 17% increase from the previous year. The company also saw a 10.2% growth in comparable store sales and a significant rise in diluted earnings per share from $0.94 to $1.35. Sprouts opened 12 new stores, bringing the total to 455, and ended the quarter with $261 million in cash and no debt on its revolving credit facility. The company repurchased 0.5 million shares and generated $410 million in cash from operations. Looking ahead, Sprouts expects continued growth with plans to open at least 35 new stores in 2025 and achieve net sales growth between 14.5% and 16%.

Sprouts Farmers Secures New $600M Credit Facility

On July 25, 2025, Sprouts Farmers Market, Inc. announced the closing of a $600 million revolving credit facility, replacing its previous $700 million facility. The new credit agreement provides Sprouts with greater financial flexibility, allowing the company to support its operations and growth plans through robust cash flow generation. The facility, which matures in July 2030, includes revised pricing terms and additional covenant flexibility, with no outstanding borrowings at the time of closing.

Sprouts Farmers Extends Distribution Agreement with KeHE

On July 17, 2025, Sprouts Farmers Market, Inc. extended its distribution agreement with KeHE Distributors, LLC, its main distributor for dry grocery and frozen foods, beyond the original expiration date of July 18, 2025. This extension allows both parties to continue negotiations for a long-term agreement, which could impact Sprouts’ supply chain stability and market operations.