SFM
Sprouts Farmers Market, Inc.
$74.89
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 1.7% above fair value
You pay
$74.89
Bear
$61.34
Fair
$73.62
Bull
$85.89
Bear
$61.34
-18.1%
$5.48 × 10x P/E
Fair
$73.62
-1.7%
$5.48 × 12x P/E
Bull
$85.89
+14.7%
$5.48 × 14x P/E
Key Value Driver
Normalized P/E multiple (12x base case)
Implied Market Multiple
13.7x
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 $92.00 from 43 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $73.62 per share.
Warnings
Wall Street's average price target is $92.00 (from 43 analysts). Our estimate is 29% 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