Freshpet (FRPT) AI Stock Analysis

• Market Cap: $3.64B
• Dividend Yield: N/A
• Average Volume (3M): 1.52M
• Price to Earnings (P/E): 80.0
• Beta (1Y): 1.03
• Revenue Growth: 27.16%
• EPS Growth: N/A
• Country: US
• Employees: 1,296
• Sector: Consumer Defensive
• Sector Strength: 90
• Industry: Packaged Foods
• EPS (TTM): 0.93
• Shares Outstanding: 48,718,620
• 10 Day Avg. Volume: 1,102,974
• 30 Day Avg. Volume: 1,517,699
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 4.33
• Price to Cash Flow (P/CF): 21.00
• P/FCF Ratio: 20.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $121.00
• Price Target Upside: 62.09% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14

Freshpet's overall stock score reflects strong financial performance and positive earnings call guidance, indicative of growth and improved profitability. However, technical indicators suggest bearish momentum, and the stock appears overvalued based on its high P/E ratio. Despite these challenges, the company's strategic initiatives and positive financial outlook contribute to a moderately favorable score.

Positive Factors

Advertising Strategy

Advertising activity continues to show a historical correlation to increased levels of website traffic, which has been a strong indicator of future household growth for FRPT.

Growth Potential

Freshpet's current ~3% market share offers meaningful growth potential in the $37B dog food market in the U.S.

Market Share

Freshpet's dominant market share position in fresh dog food in brick-and-mortar points of distribution will allow the company to approach significant AEBITDA growth in the future.

Negative Factors

Consumer Confidence

Declining consumer confidence over February and March has likely cost Freshpet ~200bps to ~300bps of topline growth in the quarter.

Price Target

Lowering price target to $140 as macro headwinds and pet specialty channel disruption create near-term pressure.

Sales Growth

The sales growth estimate for Freshpet Inc has been lowered due to adjustments in data capture.

Freshpet Business Overview & Revenue Model

Company Description

Freshpet, Inc. (FRPT) is a pet food company specializing in the production and distribution of fresh, refrigerated foods and treats for dogs and cats. The company operates predominantly in the pet food sector, focusing on providing high-quality, natural pet food products that are devoid of artificial preservatives. Freshpet's offerings are available in various formats, including rolls, bagged meals, and treats, and are distributed through a network of retail partners across North America.

How the Company Makes Money

Freshpet generates revenue through the sale of its fresh, refrigerated pet food products to a wide range of retail partners, including grocery stores, mass merchandisers, club stores, and pet specialty retailers. The company’s business model centers on producing high-quality, perishable pet food that requires refrigeration, thereby setting it apart from traditional dry or canned pet food. Freshpet's products are positioned as premium offerings, allowing the company to capture higher price points. Additionally, the company benefits from recurring revenue as pet owners regularly purchase food for their pets. Key partnerships with large retail chains and an expanding distribution network significantly contribute to its earnings, along with consistent marketing efforts to raise brand awareness and encourage consumer adoption.

Freshpet Financial Statement Overview

Summary

Freshpet has shown strong revenue growth and significant improvement in gross profit margin. While the net profit margin is positive, the EBIT margin remains low, indicating potential for better operational efficiency. The balance sheet is stable with manageable leverage, and cash flow has turned positive, reflecting strong cash generation.

Income Statement

Freshpet has demonstrated strong revenue growth, with a notable increase of 27.1% from FY 2023 to FY 2024. The gross profit margin has improved significantly to 40.6% in FY 2024, indicating enhanced efficiency. The net profit margin turned positive at 4.8%, showcasing a recovery from previous losses. However, the EBIT margin is relatively low at 3.9%, suggesting room for improvement in operational efficiency.

Balance Sheet

The company's balance sheet is stable with a debt-to-equity ratio of 0.40, reflecting a manageable level of leverage. Return on equity improved to 4.4%, indicating better utilization of equity. The equity ratio stands at 67.0%, signifying a strong equity base. Nonetheless, the increase in total debt necessitates careful monitoring.

Cash Flow

Freshpet's free cash flow turned positive in FY 2024, driven by a substantial increase in operating cash flow, which is a positive sign of financial health. The operating cash flow to net income ratio is at 3.29, indicating strong cash generation relative to net income. The free cash flow to net income ratio also reflects a robust alignment between cash generation and profitability.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
975.18M	766.89M	595.34M	425.49M	318.79M
	Gross Profit
395.96M	250.87M	186.03M	162.15M	132.91M
	EBIT
38.00M	-30.45M	-51.98M	-24.65M	-1.91M
	EBITDA
38.00M	41.10M	-14.35M	7.15M	19.21M
	Net Income Common Stockholders
46.92M	-33.61M	-55.76M	-27.69M	-3.19M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
268.63M	296.87M	132.74M	72.79M	67.25M
	Total Assets
1.57B	1.46B	1.13B	784.41M	434.39M
	Total Debt
424.09M	425.06M	5.71M	7.09M	8.40M
	Net Debt
155.46M	128.18M	-127.03M	-65.69M	-58.85M
	Total Liabilities
519.52M	510.97M	93.81M	64.66M	40.22M
	Stockholders Equity
1.06B	953.45M	1.03B	719.75M	394.17M
Cash Flow		Free Cash Flow
154.29M	-163.15M	-273.30M	-321.45M	-113.38M
	Operating Cash Flow
154.29M	75.94M	-43.23M	647.00K	21.19M
	Investing Cash Flow
-187.09M	-239.09M	-233.36M	-322.10M	-162.46M
	Financing Cash Flow
4.57M	327.29M	336.54M	326.99M	199.04M

Freshpet Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 74.65
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FRPT, the sentiment is Negative. The current price of 74.65 is below the 20-day moving average (MA) of 78.89, below the 50-day MA of 90.57, and below the 200-day MA of 128.33, indicating a bearish trend. The MACD of -5.04 indicates Negative momentum. The RSI at 37.57 is Neutral, neither overbought nor oversold. The STOCH value of 23.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FRPT.

Freshpet Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BRFS	77 Outperform	$6.71B	10.62	21.60%	2.28%	5.85%	―
SMPL	75 Outperform	$3.84B	26.50	8.40%	―	11.47%	2.59%
CENT	70 Outperform	$2.03B	18.93	8.18%	―	-2.85%	-27.70%
JJSF	70 Outperform	$2.50B	29.93	9.08%	2.37%	2.14%	5.38%
DAR	69 Neutral	$4.58B	16.78	6.21%	―	-10.96%	-68.19%
Sector *	64 Neutral	$9.18B	14.52	4.32%	185.59%	3.96%	5.53%
FRPT	63 Neutral	$3.64B	80.03	4.67%	―	27.16%	―

Freshpet Corporate Events

Freshpet Reports Strong Financial Growth in 2024

Freshpet reported significant financial progress for the fourth quarter and full year 2024, with net sales increasing by 22% and 27.2% respectively, compared to the prior year. The company achieved positive net income for the first time, driven by improved gross margins and operational efficiencies. Freshpet also provided a positive outlook for 2025, projecting further sales growth and increased profitability, reflecting its strategic focus on transforming the pet food category and enhancing shareholder value.