Freshpet stock holds Buy rating, $127 target from DA Davidson

On Tuesday, shares of Freshpet (NASDAQ:FRPT), currently trading at $80.62, maintained a Buy rating and a $127.00 price target from DA Davidson. The firm’s stance comes after Freshpet’s first-quarter 2025 performance, which provided investors with some relief as the results were not as disappointing as anticipated, coupled with a guidance cut that was within expected outcomes. The stock, which has seen a significant 49% decline over the past six months, maintains a "GOOD" overall Financial Health score according to InvestingPro analysis.

According to DA Davidson, the pet food company’s outlook is cautiously optimistic given several factors that could contribute to its recovery. These include easier comparisons to previous year’s figures, increased and more focused media efforts, a greater availability of value products, and potential benefits from distribution channels. The company has demonstrated strong revenue growth of 23.2% in the last twelve months, with analysts forecasting 18% growth for fiscal 2025. While it’s not entirely certain how consumers will react to management’s strategic changes, DA Davidson suggests that if consumption trends stabilize, Freshpet could see a boost in earnings and an expansion in valuation multiples as the second half of 2025 approaches.

The analyst’s commentary reflects a belief in Freshpet’s ability to navigate current challenges, with the expectation that the company’s corrective measures may lead to positive outcomes. "Though not quite an all clear as we assess consumer response to management’s corrective actions, if consumption trends steady from here there is potential for dual catalysts of earnings upside and multiple expansion as we move to 2H25," the analyst noted, reaffirming the firm’s Buy rating and price target for Freshpet stock.

Freshpet’s recent performance and the subsequent guidance adjustment have set the stage for what DA Davidson anticipates could be an opportunity for the company to bounce back. The firm’s maintained price target and rating reflect confidence in Freshpet’s strategic initiatives and their potential to drive growth in the latter half of the year.

In other recent news, Freshpet Inc . reported an unexpected loss in its Q1 2025 earnings, with an earnings per share (EPS) of -$0.26, missing the anticipated $0.15. Despite this, the company achieved an 18% increase in revenue year-over-year, reaching $263.2 million, though this figure also fell short of the forecasted $265.01 million. Freshpet continues to hold a 3.5% market share in the $54 billion U.S. pet food industry. The company has set its 2025 net sales guidance at $1.120-$1.150 billion, indicating a 15-18% growth, and projects an adjusted EBITDA of $190-$210 million. Jefferies analyst Kaumil Gajrawala adjusted Freshpet’s stock price target to $138, down slightly from $140, while maintaining a Buy rating. The analyst noted Freshpet’s strategic shift towards affordability and marketing adjustments, which are expected to improve returns in the second half of the year. Freshpet has also launched new product lines and expanded its direct-to-consumer business, maintaining a long-term sales target of $1.8 billion by 2027. These developments highlight Freshpet’s ongoing efforts to adapt to the current economic environment and its focus on long-term growth.

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