Sprouts Farmers Market, Inc. (SFM): What’s the Story?

Sprouts Farmers Market, Inc. (SFM) is an interesting player in the Services space, with a focus on Grocery Stores. The stock has been active on the tape, currently trading at $23.89, down from yesterday’s close by -1.85%. Given the stock’s recent action, it seemed like a good time to take a closer look at the company’s recent data.

Fundamental Analysis

It’s important to get a feel for how any stock is actually valued on the market based on its core numbers. Sprouts Farmers Market, Inc. (SFM) currently trades with a market capitalization of $3.25 Billion. That value represents a market adjusting for revenues that have been growing by 14.77 % on a quarterly year/year basis as of the company’s last quarterly report.

The balance sheet health of any company plays a key role in its ability to meet its obligations and maintain the faith of its investment base. For SFM, the company currently has $14.81 Million of cash on the books, which is offset by $14.87 Million current liabilities. You can get a sense of how sustainable that is by a levered free cash flow of $72.61 Million over the past twelve months. Generally speaking, earnings are expected to fall in coming quarters. Analysts are forecasting earnings of $0.17 on a per share basis this quarter. Perhaps, that suggests something about why 83.39% of the outstanding share supply is held by institutional investors.

Technical Analysis

As most professionals know, technical analysis can offer critical insights into what smart money and insiders think about a stock’s prospects going forward. Looking at the stock’s movement on the chart, Sprouts Farmers Market, Inc. recorded a 52-week high of $25.98. It is now trading 2.09% off that level. The stock is trading $23.52 its 50-day moving average by -0.37%. The stock carved out a 52-week low down at $17.38.

In recent action, Sprouts Farmers Market, Inc. (SFM) has made a move of +2.05% over the past month, which has come on weak relative transaction volume. Over the trailing year, the stock is underperforming the S&P 500 by 6.72, and it’s gotten there by action that has been less volatile on a day-to-day basis than most other stocks on the exchange. In terms of the mechanics underlying that movement, traders will want to note that the stock is trading on a float of 8.52% with $129.35 Million sitting short, betting on future declines. That suggests something of the likelihood of a short squeeze in shares of SFM.

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