Earning a spot on IBD Leaderboard alongside titans of tech like Nvidia and Meta Platforms, fresh pet food maker Freshpet continues to nip at its buy range. While Meta trades at the top of its buy zone and Nvidia slips as China tells companies not to buy its chips, Freshpet stock is wagging its tail again as it finds support and looks to reclaim its earlier buy point.
Freshpet Stock Tests Support After Soaring 301%
Featured as the IBD Stock Of The Day on Sept. 3 and in this column on Sept. 9, Freshpet stock has caught the eye of Wall Street with its impressive run. After bottoming out in September 2022, the pet food maker soared as much as 301% to yet another 52-week high on Sept. 19.
Freshpet cleared a 136.35 buy point in a second-stage consolidation pattern on Aug. 23. While weathering subsequent choppiness in generally below-average volume, the stock mostly held support at its 21-day exponential moving average. But on Sept. 26, Freshpet fell below that benchmark.
On Monday, the stock showed resilience. Freshpet has held support above its 50-day line as it reversed higher to erase its earlier losses.
Freshpet even managed to close just above the initial 136.35 entry.
Meanwhile, fellow IBD Leaderboard members Meta and Nvidia are showing strength and resilience. Holding right around the top of its buy range for several days, Meta just wrapped up three straight up weeks. Nvidia stock remains above its 50-day line and managed to eke out a small gain.
Freshpet's Growth Has Wall Street Licking Its Chops
Institutional investors have sunk their teeth into shares of Freshpet. The stock sports a B Accumulation/Distribution Rating and a 1.4 up/down volume ratio. The New Jersey-based company has also posted four quarters of rising fund ownership.
Freshpet is top dog among its industry peers in the packaged food group with an 88 Composite Rating.
What's driving that demand? Solid and steady sales growth is one factor. Over the last eight quarters, Freshpet has delivered sales growth ranging from 26% to 43%. In the second quarter, the company posted a 28% year-over-year gain to $235.3 million. Analysts expect growth to continue with gains of 24%, 21% and 25% over the next three reports.
Earnings growth has shown a strong turnaround. Over the last four quarters, EPS gains have ranged from 62% to 733%, although two of those spikes are based on comparisons with the prior-year quarter that showed a loss. Third-quarter forecasts call for earnings of 14 cents per share vs. a year-ago loss of 15 cents.
For the full year, analysts forecast a 217% gain to 73 cents per share. For 2025, analysts expect an 81% increase to $1.32 per share.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
