Palantir shares slip by 7% despite posting record revenue in third quarter
On Wednesday, Stifel analysts adjusted their outlook for Freshpet stock (NASDAQ:FRPT), reducing the price target to $115 from $135 while still maintaining a Buy rating. The stock, currently trading at $82.71, sits well below its 52-week high of $164.07, with InvestingPro data showing the company maintains a "GOOD" overall financial health score of 2.53 out of 5. The revision comes amid observed weakening sales and volume trends in the pet food industry. According to Stifel, year-to-date scanner data indicates a downturn in sales on a year-over-year and two-year compound annual growth rate (CAGR) basis in 2025. This, combined with missed shipments due to a distributor transition in the pet specialty channel, has led to a revised estimate of 15% year-over-year growth for the first quarter of 2025, which falls short of the consensus expectation of 18%. The company, currently valued at $4.05 billion, demonstrated strong historical performance with a 27.16% revenue growth in the last twelve months and maintains a healthy current ratio of 4.42. For deeper insights into Freshpet's financial metrics and growth potential, InvestingPro subscribers can access the comprehensive Pro Research Report, part of our coverage of 1,400+ US stocks.
Stifel's analysts have also adjusted their full-year sales growth projection for 2025 to 18%, which is below the consensus of 21%. This adjustment is made with the anticipation that Freshpet's full-year guidance of 21%-24% will likely be lowered to align closer with Stifel's updated estimate. The firm also noted a reduction in their adjusted EBITDA expectations, though by a smaller margin than the sales revision. This change reflects a degree of caution regarding initial guidance but also suggests that the company will continue to invest in advertising and media to improve household penetration.
The analysts observed that the weakening sales trends are partly due to increased volatility in the dog food category, with volumes down in eight of the twelve weeks so far in 2025. They also pointed to a modest decline in household penetration in recent quarters. The new price target of $115 is set with the expectation that Freshpet shares will trade in line with these evolving sales trends. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculation, with analyst targets ranging from $88 to $195, suggesting potential upside despite current challenges.
In other recent news, Freshpet has been the focus of multiple analyst updates concerning its financial outlook and stock ratings. Truist Securities adjusted its price target for Freshpet to $110, maintaining a Buy rating. The revision was due to changes in sales and adjusted EBITDA estimates, with the first quarter of 2025 seeing a downward adjustment. Citi also revised its expectations, lowering the price target to $96 and maintaining a Neutral stance, citing a slowdown in growth and uncertainties in consumer trends. TD Cowen cut its price target to $115 while keeping a Buy rating, attributing the change to weakened demand among low-to-middle-income consumers and distribution challenges. Piper Sandler reduced its price target from $160 to $145, maintaining an Overweight rating, due to a deceleration in revenue growth and disruptions with pet specialty distributors. Jefferies reiterated its Buy rating and $150 price target, expressing optimism about Freshpet's long-term prospects despite recent data indicating a slowdown in the category. These updates reflect a cautious but varied outlook on Freshpet's performance and growth potential in the pet food sector.
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