Why Sprouts Farmers (SFM) is a Top Value Stock for the Long-Term
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.
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 boasts a Value Style Score of A and VGM Score of A, and holds a Zacks Rank #3 (Hold) rating. Shares of Sprouts Farmers are trading at a forward earnings multiple of 15.7X, as well as a PEG Ratio of 1.8, a Price/Cash Flow ratio of 9.2X, and a Price/Sales ratio of 0.7X.
Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Eight analysts revised their earnings estimate upwards in the last 60 days for fiscal 2023. The Zacks Consensus Estimate has increased $0.04 to $2.79 per share. SFM has an average earnings surprise of 11.2%.
Investors should take the time to consider SFM for their portfolios due to its solid Zacks Ranks, notable earnings and valuation metrics, and impressive Value and VGM Style Scores.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report
