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Why Sprouts Farmers (SFM) is a Top Growth Stock for the Long-Term

Zacks Equity Research
·2-min read

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

While you may have an investing style you rely on, finding great stocks is made easier with the Zacks Style Scores. These are complementary indicators that rate stocks based on value, growth, and/or momentum characteristics.

Why This 1 Growth Stock Should Be On Your Watchlist

Different than value or momentum investors, growth-oriented investors are concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, they'll want to focus on the Growth Style Score, which analyzes characteristics like projected and historical earnings, sales, and cash flow to find stocks that will see sustainable growth over time.

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Sprouts Farmers (SFM)

Sprouts Farmers Market, Inc., which operates in a highly fragmented grocery store industry, has a unique model that features fresh produce, foods section, and a vitamin department focused on overall wellness. Moreover, the company has been diversifying its offerings to meet changing preferences of consumers, who are looking for more health and wellness products. These products are generally plant-based, gluten-free, keto-friendly, and grass-fed. The company has been focusing on natural and organic food, which is one of the fastest growing segments in the industry.

SFM boasts a Growth Style Score of A and VGM Score of B, and holds a Zacks Rank #1 (Strong Buy) rating. Its bottom-line is projected to rise 9.5% year-over-year for 2024, while Wall Street anticipates its top line to improve by 8%.

Eight analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.16 to $3.11 per share for 2024. SFM boasts an average earnings surprise of 9.2%.

Looking at cash flow, Sprouts Farmers is expected to report cash flow growth of 10.4% this year; SFM has generated cash flow growth of 14.9% over the past three to five years.

SFM should be on investors' short lists because of its impressive growth fundamentals, a good Zacks Rank, and strong Growth and VGM Style Scores.

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Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research