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Investing.com - TD Cowen has reduced its price target on The Simply Good Foods Group (NASDAQ:SMPL) to $34.00 from $36.00 while maintaining a Hold rating on the stock. The company, currently trading at $32.28 and near its 52-week low of $30.46, appears undervalued according to InvestingPro analysis.
The firm cited Simply Good Foods’ third-quarter performance, which beat consensus expectations, but noted management has moved guidance to the low end of its fiscal year 2025 sales and EBITDA ranges due to a slower-than-expected start to the fourth quarter. The $3.25B market cap company has demonstrated strong revenue growth of 14.22% over the last twelve months, maintaining healthy liquidity with a current ratio of 3.95.
According to TD Cowen, Atkins’ sales declines are expected to accelerate in fiscal year 2026 due to distribution losses at a major customer, with these losses only partially offset by gains from the company’s Quest and OWYN brands.
The analyst firm has consequently lowered its fiscal year 2026 sales and EBITDA growth projections below the company’s long-term algorithm.
The Simply Good Foods Group produces nutrition bars, ready-to-drink shakes, and other nutritional snacking products under brands including Atkins, Quest, and OWYN.
In other recent news, The Simply Good Foods Group reported third-quarter earnings that exceeded analyst expectations, with an EBITDA of $73.9 million, marking a 3% increase from the previous year. The company saw a 3.8% growth in organic sales, driven by strong performances from its Quest and OWYN brands, which grew by 11% and 24%, respectively. However, the Atkins brand continues to face challenges, with sales declining by 13%. As a result, Simply Good Foods adjusted the high end of its fiscal year 2025 guidance, projecting sales growth between 8.5% and 9.5% and EBITDA growth between 4% and 5%. Stifel maintained its Buy rating with a price target of $38.00, while Morgan Stanley (NYSE:MS) reiterated an Equalweight rating with a $36.00 target. Stifel noted weakening consumption trends and potential distribution losses for the Atkins brand, while Citi lowered its price target to $40.00, anticipating a slight sales miss. Despite these mixed signals, Simply Good Foods’ strong brand performances and adjusted forecasts remain focal points for investors.
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