SFM
Sprouts Farmers Market, Inc.
$86.71
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 18.3% above fair value
You pay
$86.71
Bear
$61.09
Fair
$73.32
Bull
$85.54
Bear
$61.09
-29.5%
$5.48 × 10x P/E
Fair
$73.32
-15.4%
$5.48 × 12x P/E
Bull
$85.54
-1.3%
$5.48 × 14x P/E
Key Value Driver
Normalized P/E multiple (12x base case)
Implied Market Multiple
15.8x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $91.00 from 43 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $73.32 per share.
Warnings
Wall Street's average price target is $91.00 (from 43 analysts). Our estimate is 28% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples