Why Simply Good Foods is on investors’ radar today

Simply Good Foods (SMPL) has been drawing fresh attention after a weak share price stretch, with the stock showing negative returns over the past month and past 3 months despite ongoing profitability.

At a share price of $15.95, Simply Good Foods has seen a 24% share price decline over the past month and an 18% year to date share price decline, while the 1 year total shareholder return is down 58%. This points to fading momentum as investors reassess risks and future prospects.

If this pullback has you looking for other ideas in the market, you might want to scan our screener of 23 top founder-led companies as potential fresh ideas beyond packaged foods.

So with Simply Good Foods trading well below some valuation estimates yet still profitable, is this sharp share price reset opening the door to a potential opportunity, or is the market already factoring in its future growth?

Most Popular Narrative: 43.8% Undervalued

With Simply Good Foods last closing at $15.95 against a narrative fair value of $28.40, the widely followed view suggests a large valuation gap that hinges on how the brands and margins evolve from here.

The successful launch and scaling of Quest's salty snacks platform, which has grown to a $300 million business, suggests a long runway for further penetration and growth. This could drive future revenue growth for Simply Good Foods.

Curious how a snacks portfolio supports that fair value at a 6.978% discount rate? Revenue mix, margin rebuild and future earnings assumptions are doing the heavy lifting. The full narrative spells out how those moving parts connect to $28.40.

Result: Fair Value of $28.40 (UNDERVALUED)

However, you also need to weigh the risk that weakness in Atkins products or a bumpy OWYN integration could undercut those margin and growth assumptions.

Build Your Own Simply Good Foods Narrative

If you look at the numbers and come to a different conclusion, or simply prefer to test your own view, you can build a custom Simply Good Foods story in just a few minutes: Do it your way.

A great starting point for your Simply Good Foods research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If Simply Good Foods has sharpened your interest, do not stop here. Use the screener to hunt for fresh opportunities that match your style and risk tolerance.

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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.