Are You Looking To Buy Sprouts Farmers Market Inc. (SFM)? First, Read This

Sprouts Farmers Market Inc. (NASDAQ:SFM) traded on Tuesday with a subtraction of -$0.54 to $22.09, a downside of -2.39 percent. An average of 2,205,072 shares of common stock have been traded in the last five days. There was a fall of -$0.98 in the past week. The last 20 days have seen an average of 2,152,048 shares traded, while the 50-day average volume stands at 1,986,447.

SFM stock has decreased by -9.04% in the last month. The company shares reached their 1-month lowest point of $21.18 on 10/05/21. With the stock rallying to its 52-week high on 06/10/21, shares of the company touched a low of $18.21 and a high of $29.35 in 52 weeks. In spite of this, the price is down -24.74% from the 52-week high.

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Insider Transactions

55 days have passed since Sprouts Farmers Market Inc. (SFM) last reported insider trading activity. Neal John Scott, who is Chief Fresh Merchandising Off., most recently acquired $4,840 shares at $24.74 per share on Aug 11. In this transaction, the insider spent $119,742. Chief Executive Officer, Sinclair Jack, disposed of 26,553 shares at a price of $26.17 on Jun 25. The insider now owns more than $694,892 worth of shares. Prior to that, SVP, Chief Marketing Officer Phipps Gilliam went on to Sale 2,364 shares at $25.72 each on May 13. An amount of $60,802 was transacted.

Valuation Metrics

Sprouts Farmers Market Inc. (SFM) has a trailing price-to-earnings (P/E) ratio of 9.82, which compares with the 18.21 for the broader industry and 24.42 for the sector. This means investors are optimistic about the stock’s future prospects. In the last five years, Sprouts Farmers Market Inc.’s PE ratio has ranged between 28.98 and 7.959. The stock’s beta is 0.26. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 0.43, the price-to-book (PB) ratio at 2.79, and the price-to-cash flow ratio at 15.03.

The quick ratio of Sprouts Farmers Market Inc. for the three months ended June 29 was 0.60, and the current ratio was 1.10, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.27 and a total debt to equity ratio of 0.28 for the quarter ending June 29. On the profitability front, the trailing 12-month gross margin is 36.80% against a 5-year average of 34.3%. Sprouts Farmers Market Inc.’s EBITDA margin for the year ending June 29 is 9.54%, while its operating margin for the same period stands at 5.90%. Its gross profit as reported stood at $2.38 billion compared to revenue of $6.47 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Sprouts Farmers Market Inc.’s return on assets was 9.60%, compared to 9.2% over the last five years. In the past year, the return on investment has been 26.40%, and the 5-year average is 13.3%. Meanwhile, the return on equity (ROE) for the past 12 months has been 30.30% and the 5-year average holds at 26.2%. For the broader industry, ROE averaged 8.78 over the past year.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Sprouts Farmers Market Inc. (SFM) price momentum. RSI 9-day as of the close on 04 October was 38.62%, suggesting the stock is Neutral, with historical volatility in this time frame at 42.02%.

As of today, SFM’s price is $22.68 -4.26% or -$0.98 from its 5-day moving average. SFM is currently trading -7.48% lower than its 20-day SMA and -14.95% lower than its 100-day SMA. However, the stock’s current price level is -10.41% below the SMA50 and +8.31% above the SMA200.

The stochastic %K and %D were 21.78% and 31.19%, respectively, and the average true range (ATR) was 0.83. With the 14-day stochastic at 29.89% and the average true range at 0.77, the RSI (14) stands at 39.33%. The stock has reached -0.52 on the 9-day MACD Oscillator while the 14-day reading was at -0.48.

Analyst Ratings

BMO Capital Markets downgraded Sprouts Farmers Market Inc. (NASDAQ: SFM) to a an Underperform rating in its most recent analyst report. Previously, the stock was rated as a a Market perform.The consensus rating for Sprouts Farmers Market Inc. (SFM) among analysts is Hold. According to current brokerage recommendations, 4 brokerage firms advise that investors sell SFM, while 8 suggest investors hold. There are 2 analysts who rate the stock as underweight. The stock is rated overweight by 2 analysts, while 4 others rate it as a “buy”.

What is SFM’s price target for the next 12 months?

Analysts predict a range of price targets between $18.00 and $37.00, with a median target of $25.00. Taking a look at these predictions, the average price target given by analysts for Sprouts Farmers Market Inc. (SFM) stock is $26.38.


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