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Sprouts Farmers (SFM) Outpaces Stock Market Gains: What You Should Know

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Sprouts Farmers (SFM - Free Report) closed at $21.62 in the latest trading session, marking a +1.12% move from the prior day. This change outpaced the S&P 500's 0.05% gain on the day. Meanwhile, the Dow gained 0.48%, and the Nasdaq, a tech-heavy index, lost 0.61%.

Coming into today, shares of the natural and organic food retailer had lost 12.63% in the past month. In that same time, the Retail-Wholesale sector gained 2.24%, while the S&P 500 lost 0.52%.

Wall Street will be looking for positivity from SFM as it approaches its next earnings report date. On that day, SFM is projected to report earnings of $0.35 per share, which would represent year-over-year growth of 59.09%. Meanwhile, our latest consensus estimate is calling for revenue of $1.63 billion, up 13.4% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.12 per share and revenue of $6.52 billion, which would represent changes of +69.6% and +15.77%, respectively, from the prior year.

Any recent changes to analyst estimates for SFM should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. SFM is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that SFM has a Forward P/E ratio of 10.09 right now. This valuation marks a discount compared to its industry's average Forward P/E of 13.59.

It is also worth noting that SFM currently has a PEG ratio of 1.09. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Food - Natural Foods Products industry currently had an average PEG ratio of 3.81 as of yesterday's close.

The Food - Natural Foods Products industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 124, which puts it in the top 49% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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