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Freshpet (FRPT) Surpasses Market Returns: Some Facts Worth Knowing

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Freshpet (FRPT - Free Report) closed the most recent trading day at $57.03, moving +2.35% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.27%. Meanwhile, the Dow gained 0.43%, and the Nasdaq, a tech-heavy index, added 0.37%.

The seller of refrigerated fresh pet food's stock has dropped by 10.66% in the past month, falling short of the Consumer Staples sector's loss of 1.32% and the S&P 500's gain of 1.85%.

The investment community will be paying close attention to the earnings performance of Freshpet in its upcoming release. In that report, analysts expect Freshpet to post earnings of $0.44 per share. This would mark year-over-year growth of 83.33%. At the same time, our most recent consensus estimate is projecting a revenue of $285.88 million, reflecting a 12.83% rise from the equivalent quarter last year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.31 per share and a revenue of $1.11 billion, indicating changes of +70.13% and +13.86%, respectively, from the former year.

Investors should also take note of any recent adjustments to analyst estimates for Freshpet. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. Right now, Freshpet possesses a Zacks Rank of #3 (Hold).

Digging into valuation, Freshpet currently has a Forward P/E ratio of 42.53. Its industry sports an average Forward P/E of 16.04, so one might conclude that Freshpet is trading at a premium comparatively.

It is also worth noting that FRPT currently has a PEG ratio of 0.98. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Food - Miscellaneous industry stood at 1.8 at the close of the market yesterday.

The Food - Miscellaneous industry is part of the Consumer Staples sector. At present, this industry carries a Zacks Industry Rank of 169, placing it within the bottom 32% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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