Sprouts Farmers Market, Inc. (SFM) stock analysis

P/E below its 5-year median

Sprouts Farmers Market's P/E of 9.7 is below its own 5-year median of 15.9.

P/E below the industry

Sprouts Farmers Market's P/E of 9.7 is below the Consumer staples median of 23.3.

EV/EBITDA below its 5-year median

Sprouts Farmers Market's EV/EBITDA of 5.3 is below its 5-year median of 8.7.

P/B above the industry

Sprouts Farmers Market's price-to-book of 3.05 is above the Consumer staples median of 2.93.

Trading below fair value

The share price of $50.56 is below our fair value estimate of $83.74.

Margin of safety over 20%

The price is 39.6% below fair value, more than the 20% cushion we look for.

Revenue growing 10%+ a year

Revenue grew 11.2% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 30.5% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -3.4% over the last twelve months, against a 5-year average of 12.7% a year.

Growing faster than the industry

Revenue grew 5.3% over the last twelve months; the Consumer staples median is 3.8%.

Guidance raised

Sprouts Farmers Market raised its full year 2026 Net sales growth outlook on Jul 29, 2026.

Gross margin slipping

Gross margin was 38.6% over the last twelve months, against 38.8% a year earlier.

Return on equity over 15%

Return on equity was 33.5% over the last twelve months and averaged 29.1% over five years.

Return on capital over 10%

Return on invested capital was 41.2%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Sprouts Farmers Market's return on equity of 33.5% is above the Consumer staples median of 6.3%.

Earnings grew over 5 years

Net income grew 12.7% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 5.4% over the last twelve months, against a 5-year average of 4.5%.

Net margin above the industry

Sprouts Farmers Market's net margin of 5.4% is above the Consumer staples median of 0.7%.

No debt

Sprouts Farmers Market has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets don't cover short-term debts

Current assets are 0.97 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.69; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Sprouts Farmers Market has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.