Freshpet is the IBD Stock Of The Day as the pet food maker flashes a bullish signal ahead of a potential breakout. After soaring in 2024, Freshpet stock eyes a turn to profitability.
In November, Freshpet highlighted 25 consecutive quarters of sales growth above 25%.
'Rare Breed': Consumer Stock With High Growth
Healthy food is hot — for pets as well as their human owners. Freshpet provides steam-cooked, grain-free and vitamin-rich meals for canines and cats, which come along with a healthy price tag.
The Bedminster, N.J.-based company is winning over pet owners willing to pony up for premium pet food, despite inflation. This has made FRPT stock "a rare name" in the consumer sector with high growth, one analyst told IBD last year.
Further, Freshpet seized an opportunity as more Americans adopt (and spend more on) pets. So did Chewy, an online retailer of pet products.
Freshpet Stock Near Buy Point
Shares are near the top of a shallow cup base with a 160.91 buy point, according to MarketSurge charts. Freshpet stock dipped 0.4% to 158.03 in Thursday's stock market action. It regained the 50-day moving average in mid January and remains above all the shorter- and longer-term moving averages.
FRPT stock rocketed 78% in the past year as investors anticipated the shift to annual profits. That run included two earnings gap-ups in March and May, and a successful breakout in August. Freshpet stock now sits about 2% below the latest entry, which marks the 52-week high.
The relative strength line for Freshpet stock has risen to highs ahead of a potential breakout, an especially bullish sign. That is marked by the blue dot on the weekly chart. A rising RS line means that a stock is outperforming the S&P 500 index. It is the blue line in the chart provided.
A 91 RS Rating means that Freshpet has outpaced 91% of all stocks in IBD's database over the past year. Chewy stock shows an RS Rating of 96. It is extended from the latest breakout, meaning shares are not in buy range.
In pet foods, Freshpet specializes in products made with fresh meat, vegetables and fruits, as its name implies. Those products naturally carry a premium vs. the mostly "shelf stable" products from its more mature rivals. General Mills owns the Blue Buffalo brand. Nestle owns Purina. J.M. Smucker owns Milk-Bone.
The stocks of all those established rivals continue to plumb lows.
Freshpet Earnings And Outlook
The IBD Stock Checkup tool shows that Freshpet stock carries a perfect Composite Rating of 99. The rating rolls various fundamental and technical metrics into one easy-to-use score.
It holds an EPS Rating of 74 out of a best-possible 99.
Freshpet is likely to report earnings for the fourth quarter and full-year 2024 in early March.
For the third quarter, Freshpet delivered an earnings beat-and-raise report. It swung to EPS of 24 cents from a loss of 15 cents a year ago.
Out of the past four quarters, Freshpet delivered positive earnings in three. Analysts anticipate the first annual profit in 2024. They project a 68.5% earnings jump in 2025 as revenue grows 25%.
Also in 2025, Freshpet is expected to exceed $1 billion in revenue for the first time.
Freshpet has beaten sales expectations for five quarters in a row. It has met or beaten earnings expectations for six quarters in a row.
Analysts are watching debt creep and cash burn at this still-growing company.
The Chilled Life: Premium, Fresh Pet Foods
Freshpet produces and sells its fresh products through company-owned refrigerators placed in grocery stores, club stores and specialty stores. Some analysts say that Freshpet stock's focus on premium fresh food — one of the fastest-growing segments in pet foods — should keep driving robust growth ahead.
Four mutual funds from the IBD Mutual Fund Index hold Freshpet stock. And this top growth stock enjoys six quarters of rising fund ownership of shares.
Please follow Aparna Narayanan on X @IBD_Aparna for more coverage.
