Chip stocks fall with Nvidia after data center rev disappointment
Investing.com -- Shares of Freshpet (NASDAQ:FRPT) tumbled 14% after the pet product retailer posted mixed fourth-quarter results and provided an outlook that fell short of some analyst expectations. Despite reporting a rise in adjusted Ebitda and net sales for the quarter, the company’s earnings per share and sales forecast did not meet the consensus estimates, leading to a negative response in the market.
The company’s fourth-quarter earnings per share (EPS) came in at 36 cents, which was an improvement from 31 cents year-over-year (YoY) but below the estimated 42 cents. Adjusted Ebitda saw a significant increase of 68% YoY to $52.6 million, surpassing the $47.6 million estimate. Net sales grew 22% YoY to $262.7 million, yet this was slightly under the expected $264.3 million. The adjusted gross margin was a bright spot, coming in at 48.1% compared to 41.1% YoY and beating the 45.8% estimate.
For the year ahead, Freshpet forecasts adjusted Ebitda to be at least $210 million, which is above the Consensus estimate of $204.9 million. However, the net sales projection of $1.18 billion to $1.21 billion is below the estimated $1.22 billion. The company also anticipates capital expenditures of about $250 million, higher than the $232.6 million estimate.
Analysts have given mixed reviews on Freshpet’s performance and outlook. Piper Sandler remains optimistic, noting the company’s sustainable growth in consumer demand and achievable near-term guidance. TD Cowen acknowledged the weaker than expected sales growth but suggested that the market may have been prepared for this due to recent softness in the dog food category. Truist Securities expects the company’s conservative margin expansion outlook for 2025 to be exceeded, while William Blair highlighted the strong earnings quality with sales in line and gross margin above expectations.
Investors appear to be weighing the mixed signals, with the stock’s decline reflecting concerns over the slower growth profile and the potential impact of supply chain constraints on the company’s top-line growth. Freshpet’s emphasis on managing growth to avoid these constraints may reassure some investors, but the current market reaction indicates a cautious stance as the company navigates the challenges ahead.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.