• If you are wondering whether United Natural Foods at around US$32.52 offers good value today, it helps to first separate short term price noise from the underlying business and what you are actually paying for it.
• The stock has been fairly flat over the last month with a 0.0% 30 day return, yet it is up 19.2% over the past year and still shows a 20.9% decline over three years alongside a 46.5% gain over five years, which can leave investors unsure how to read the risk and reward trade off.
• Recent coverage has focused on United Natural Foods as a key player in the US consumer retailing space, with attention on how it is adapting its wholesale and distribution model and responding to changing demand across natural, organic and conventional products. This context helps explain why the share price has seen periods of renewed interest as investors weigh its role in food distribution against past volatility.
• On Simply Wall St's 6 point valuation checklist, United Natural Foods scores 6 out of 6, suggesting the stock currently screens as undervalued on all of the checks used. Next, we will look at how different valuation methods arrive at that view before finishing with a more holistic way to think about what the market might be pricing in.

Approach 1: United Natural Foods Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a company might be worth today by projecting its future cash flows and then discounting those back to a present value using a required rate of return.

For United Natural Foods, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The company’s latest twelve month free cash flow is about $253.7 million. Analysts provide explicit FCF estimates out to 2030, with Simply Wall St extrapolating beyond the typical 5 year analyst window. Within these projections, forecast free cash flow for 2026 is $394.35 million and for 2030 is $557 million, all in US$ terms.

Aggregating and discounting these cash flows leads to an estimated intrinsic value of about $119.88 per share. Compared with the recent share price of around $32.52, the DCF suggests the stock trades at an implied 72.9% discount to this estimate. This indicates a wide gap between price and the modeled value.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests United Natural Foods is undervalued by 72.9%. Track this in your watchlist or portfolio, or discover 876 more undervalued stocks based on cash flows.

Approach 2: United Natural Foods Price vs Sales

For companies where earnings can be volatile, the P/S ratio is often a useful cross check because it compares the value the market places on the business to the revenue it generates, rather than to net profit that can swing with one off items.

In simple terms, investors usually accept a higher or lower P/S multiple depending on what they expect for revenue growth and how confident they feel about the risks around that growth. Higher growth and lower perceived risk often justify a higher P/S multiple, while lower growth or higher risk usually point to a lower, more conservative multiple.

United Natural Foods currently trades on a P/S of 0.06x. That is well below the Consumer Retailing industry average of 0.43x and also below its peer group average of 0.78x. Simply Wall St’s Fair Ratio for United Natural Foods is 0.16x, which is its proprietary estimate of what a more appropriate P/S might be once factors like growth outlook, profit margins, size and risk profile are brought together. Because this Fair Ratio is tailored to the company rather than a broad group, it can be more informative than a simple peer or industry comparison. With the actual 0.06x P/S sitting below the 0.16x Fair Ratio, the shares screen as undervalued on this measure.

Result: UNDERVALUED

P/S ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1441 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your United Natural Foods Narrative

Earlier we mentioned that there is an even better way to think about valuation. On Simply Wall St that starts with Narratives, where you tell a clear story about United Natural Foods, link that story to your own assumptions for future revenue, earnings and margins, and the platform converts it into a fair value that you can easily compare with today’s share price. This allows you to judge whether it looks expensive or cheap, track how that view shifts as news or earnings update the numbers in real time, and see how different investors can land in very different places. For example, one Narrative on the Community page is currently applying a fair value of US$39.13 per share for NYSE:UNFI, while another uses a lower fair value based on more cautious expectations for earnings and risk.

Do you think there's more to the story for United Natural Foods? Head over to our Community to see what others are saying!

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.