New York entry: why Centereach matters for Sprouts Farmers Market (SFM)

Sprouts Farmers Market (SFM) is entering New York with a new store in Centereach, Long Island, opening January 30. This expansion puts the grocer into a large, highly competitive food retail market.

At a share price of US$66.34, Sprouts Farmers Market has recently seen a 4.52% 1 day share price decline and a 17.73% year to date share price decline. Its 1 year total shareholder return of 60.97% contrasts with very large 3 year and strong 5 year total shareholder returns that suggest long term investors have been rewarded even as recent momentum has cooled, with the New York entry likely feeding into how the market weighs future growth against current risks.

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With the share price cooling after very large multi year gains and trading at a discount to both analyst targets and some intrinsic estimates, you have to ask: is Sprouts now undervalued, or is the market already pricing in future growth?

Most Popular Narrative: 45.6% Undervalued

Compared with the last close at $66.34, the most followed narrative pegs Sprouts Farmers Market’s fair value closer to $122, which puts that New York opening into a much bigger growth story.

The company generated $4.46B in revenue during H1 2025 (+18% YoY) while expanding gross margins to 39.2% from 38.1%, a remarkable achievement in the razor thin grocery industry. The specialty grocer's 455 stores are capturing market share with blistering 10.9% comparable store sales growth, while its zero debt balance sheet and $410M in H1 2025 operating cash flow ($580M+ annualized) provide ammunition for aggressive expansion.

Curious what kind of revenue trajectory and margin profile has to sit behind a fair value that far above today’s price? The narrative leans heavily on comp growth, store rollout pace, and where profitability could settle once that expansion plan matures. If you want to see exactly how those moving parts fit together into the $122 view, the full story is worth a look.

Result: Fair Value of $122 (UNDERVALUED)

However, sustained double digit comp expectations and tight liquidity, with a current ratio of 0.98, could quickly challenge this bullish fair value story.

Build Your Own Sprouts Farmers Market Narrative

If you look at this and think you would weigh the numbers differently, you can pull up the same data, tweak the assumptions, and Do it your way in just a few minutes.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Sprouts Farmers Market.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.