Sprouts Farmers Market Stock Up Over 280% Since 2020 on Loyal Customers and Strong Growth Prospects
-
Sprouts Farmers Market (SFM) is a specialty grocer that has seen its stock price rise over 280% since 2020. It offers a wide selection of organic, keto, plant-based and other specialty items.
-
SFM has very high customer satisfaction (NPS of +57) leading to loyal repeat customers. It still has plenty of room to expand, targeting 10% annual store growth.
-
SFM is highly profitable (20% ROIC) giving it funds to invest in growth and buy back shares, further boosting EPS.
-
The stock's valuation has tripled to a P/E of 24, but that is still in line with the broader market. Continued strong growth is expected.
-
Despite the huge run-up, dollar-cost averaging into SFM makes sense given the company's bright prospects balanced against the elevated valuation.