US stock futures flat after Wall St drops on Trump tariffs, soft jobs data
On Thursday, DA Davidson analyst Brian Holland maintained a Neutral rating on The Simply Good Foods Company (NASDAQ:SMPL), with a steady price target of $35.00, sitting at the lower end of the analyst range that extends to $48.00. Holland acknowledged that SMPL's performance in the second quarter of fiscal year 2025 exceeded both DA Davidson's and the consensus estimates, supported by strong revenue growth of 11.47% over the last twelve months. He indicated that, based on the current data, the company appears to be on track or even possibly ahead of schedule to achieve its forecast for the full fiscal year 2025.
Holland's analysis suggests that SMPL's current innovation wave is surpassing prior ones in performance. According to InvestingPro data, the company maintains excellent financial health with a "GREAT" overall score and operates with a robust current ratio of 4.27, indicating strong liquidity. Moreover, he commended the company's management for adopting what he considers a more realistic strategy regarding the Atkins brand, which is part of SMPL's portfolio.
Despite the positive outlook on the company's operational progress, the Neutral rating, according to Holland, represents a cautious stance on SMPL's valuation at present, with the stock trading at a P/E ratio of 23.05. InvestingPro analysis suggests the stock is slightly undervalued based on its Fair Value model, with additional insights available in the comprehensive Pro Research Report. However, he noted that growing investor confidence in the company's potential to deliver above-expectation performance in fiscal year 2026 could position SMPL for a stronger performance in the near term.
The analyst's comments reflect an observation of the company's strategic measures and market positioning, without suggesting any imminent changes to the stock rating. Holland's statement also implies an openness to the possibility that SMPL could exceed expectations in the following fiscal year, which might lead to a reassessment of the stock's value by investors. For deeper insights into SMPL's valuation and growth prospects, InvestingPro subscribers can access 7 additional ProTips and comprehensive financial metrics.
In other recent news, Simply Good Foods Co reported strong financial results for the second quarter of fiscal year 2025. The company delivered an adjusted earnings per share of $0.46, which exceeded analysts' expectations of $0.41. Revenue for the quarter reached $359.7 million, marking a 15.2% increase year-over-year, driven by organic growth and contributions from new products. Analyst firms have responded positively, with Bernstein raising its price target for Simply Good Foods to $48, citing robust earnings results and a consistent fiscal year 2025 guidance. Mizuho (NYSE:MFG) also maintained an Outperform rating, emphasizing the company's strong revenue performance amidst industry challenges.
Additionally, Simply Good Foods' acquisition of OWYN has shown promising results, contributing $33.8 million to sales in the quarter. The company anticipates OWYN's growth to further boost organic sales growth as it approaches the one-year anniversary of the acquisition. Despite anticipated cost pressures in the second half of the year, including those related to tariffs and rising input costs, Simply Good Foods has kept its full-year guidance unchanged, reflecting confidence in its financial health and market strategy. The company's continued focus on innovation and distribution strategies has been pivotal in sustaining its growth trajectory.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.