Sprouts Farmers Market, Inc.
Sprouts Farmers Market, Inc. Fundamental Analysis
Sprouts Farmers Market, Inc. (SFM) shows strong financial fundamentals with a PE ratio of 13.33, profit margin of 5.95%, and ROE of 38.21%. The company generates $8.9B in annual revenue with strong year-over-year growth of 12.90%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 55.4/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze SFM's fundamental strength across five key dimensions:
Efficiency Score
ExcellentSFM demonstrates superior asset utilization.
Valuation Score
ModerateSFM shows balanced valuation metrics.
Growth Score
ExcellentSFM delivers strong and consistent growth momentum.
Financial Health Score
WeakSFM carries high financial risk with limited liquidity.
Profitability Score
ModerateSFM maintains healthy but balanced margins.
Key Financial Metrics
Is SFM Expensive or Cheap?
P/E Ratio
SFM trades at 13.33 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, SFM's PEG of 5.34 indicates potential overvaluation.
Price to Book
The market values Sprouts Farmers Market, Inc. at 4.98 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 6.04 times EBITDA. This is generally considered low.
How Well Does SFM Make Money?
Net Profit Margin
For every $100 in sales, Sprouts Farmers Market, Inc. keeps $5.95 as profit after all expenses.
Operating Margin
Core operations generate 7.80 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $38.21 in profit for every $100 of shareholder equity.
ROA
Sprouts Farmers Market, Inc. generates $12.59 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Sprouts Farmers Market, Inc. generates limited operating cash flow of $719.46M, signaling weaker underlying cash strength.
Free Cash Flow
Sprouts Farmers Market, Inc. produces free cash flow of $469.43M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $4.82 in free cash annually.
FCF Yield
SFM converts 6.72% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
13.33
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
5.34
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.98
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.80
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.39
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.93
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.38
vs 25 benchmark
ROA
Return on assets percentage
0.13
vs 25 benchmark
ROCE
Return on capital employed
0.21
vs 25 benchmark
How SFM Stacks Against Its Sector Peers
| Metric | SFM Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 13.33 | 23.01 | Better (Cheaper) |
| ROE | 38.21% | 1228.00% | Weak |
| Net Margin | 5.95% | -4010.00% (disorted) | Weak |
| Debt/Equity | 1.39 | 0.78 | Weak (High Leverage) |
| Current Ratio | 0.93 | 2.35 | Weak Liquidity |
| ROA | 12.59% | -157546.00% (disorted) | Strong |
SFM outperforms its industry in 2 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Sprouts Farmers Market, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
62.93%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
202.53%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthFCF CAGR
116.04%
Industry Style: Defensive, Dividend, Low Volatility
High Growth