Why Sprouts Farmers (SFM) is a Top Value Stock for the Long-Term
For new and old investors, taking full advantage of the stock market and investing with confidence are common goals.
While you may have an investing style you rely on, finding great stocks is made easier with the Zacks Style Scores. These are complementary indicators that rate stocks based on value, growth, and/or momentum characteristics.
Why Investors Should Pay Attention to This Value Stock
Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.
Sprouts Farmers (SFM)
Sprouts Farmers Market, Inc., which operates in a highly fragmented grocery store industry, has a unique model that features fresh produce, foods section, and a vitamin department focused on overall wellness. Moreover, the company has been diversifying its offerings to meet changing preferences of consumers, who are looking for more health and wellness products. These products are generally plant-based, gluten-free, keto-friendly, and grass-fed. The company has been focusing on natural and organic food, which is one of the fastest growing segments in the industry.
SFM sits at a Zacks Rank #3 (Hold), holds a Value Style Score of A, and has a VGM Score of A. Compared to the Food - Natural Foods Products industry's P/E of 15.5X, shares of Sprouts Farmers are trading at a forward P/E of 15.5X. SFM also has a PEG Ratio of 1.7, a Price/Cash Flow ratio of 8.9X, and a Price/Sales ratio of 0.7X.
Many value investors pay close attention to a company's earnings as well. For SFM, one analyst revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.01 to $2.75 per share for 2023. Per share SFM boasts an average earnings surprise of 14.3%.
With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding SFM to their portfolios.
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Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report
