Freshpet’s Growth and Profitability Outlook Affirmed with Buy Rating

Freshpet (FRPT – Research Report), the Consumer Defensive sector company, was revisited by a Wall Street analyst on April 28. Analyst Peter Benedict from Robert W. Baird reiterated a Buy rating on the stock and has a $125.00 price target.

Peter Benedict has given his Buy rating due to a combination of factors that demonstrate Freshpet’s robust growth and improving profitability. Benedict highlights the company’s substantial volume growth and its enhanced earnings before interest, taxes, depreciation, and amortization (EBITDA) margins as key achievements in the previous year, which he expects to persist into the first quarter. He also notes Freshpet’s revenue and adjusted EBITDA estimates are above the consensus, suggesting a strong fiscal performance that supports a continued positive outlook. Benedict’s confidence is further reinforced by the anticipation that Freshpet will at least reiterate its full-year guidance, underlining the company’s steady top-line growth and significant potential for margin expansion.

From a more detailed perspective, Benedict’s optimism is fueled by Freshpet’s expected strong year-over-year growth rate, which is likely to be the highest for the year, driven in part by the effects of increased media spending. Additionally, he points to the company’s growing household penetration and user base as indicators of sustained growth, despite a moderation in the increase of the buying rate among existing users. Benedict’s forecast for the company’s profitability is also positive, with projections of continued margin improvement and an adjusted EBITDA margin increase. Despite a projected negative free cash flow in the short term, Benedict underscores Freshpet’s healthy cash position and stresses the importance of the company’s path to positive free cash flow by FY26. With a strong year-to-date stock performance and a valuation that offers potential upside compared to peers, Benedict maintains an Outperform rating with a $125 price target.

According to TipRanks, Benedict is a top 100 analyst with an average return of 14.8% and a 68.40% success rate. Benedict covers the Consumer Cyclical sector, focusing on stocks such as Costco, Tractor Supply, and Home Depot.

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Freshpet (FRPT) Company Description:

Freshpet, Inc. engages in the manufacturing, marketing, and distribution of pet food and pet treats for dogs and cats. Its products are sold throughout the United States and in Canada under the Freshpet Select, Vital and Nature’s Fresh brands. Its products include deli fresh grain free chicken recipe for dogs; dog joy turkey and apple bites treats for dogs; nature’s fresh grain free chicken recipe for cats; and vital grain free chicken and ocean whitefish recipe for cats. The company was founded by Scott Morris and Cathal Walsh in November 2004 and is headquartered in Secaucus, NJ.