SFM - Sprouts Farmers Market's Stock Momentum Has Space Left

2024-06-09 07:22:33 ET

Summary

• Sprouts Farmers Market has grown its grocery store chain well in the past years, achieving a good return on capital. The company sees accelerated growth ahead, also targeting greater ROIC.
• The company targets stable EBIT margins, but I believe that some margin leverage could be revealed in the long term due to underlying economics.
• The valuation still has room left after a significant stock rally.

Sprouts Farmers Market ( SFM ) operates grocery stores in the United States. The company’s store concept differentiates itself from most of its competitors with an offering based on organic, fresh produce and other more health-conscious products. SFM has a long history of growing the grocery store network throughout the country....

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