• If you are wondering whether Simply Good Foods is attractively priced right now, looking at what the current share price implies about the business can help you frame that question clearly.
• The stock trades at US$20.21, with returns of 3.3% year to date but a 48.6% decline over the last year, which gives mixed signals about how the market is currently viewing its prospects and risk.
• Recent coverage of Simply Good Foods has focused on its position in the branded snacks and nutritional products space and how management is trying to keep the core brands in front of health conscious consumers. This context is important because it helps explain why sentiment can shift quickly when investors reassess growth potential or the strength of the brand portfolio.
• On our simple checklist of six valuation tests, Simply Good Foods scores a 4 out of 6. This suggests some areas where the shares look inexpensive and others where they look more fully priced. Next, we will look at how different valuation methods treat the stock before finishing with a broader way to think about what that means for you.

Approach 1: Simply Good Foods Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business might be worth by projecting its future cash flows and then discounting those back to today to get a present value per share.

For Simply Good Foods, the model uses a 2 Stage Free Cash Flow to Equity approach. The latest twelve month Free Cash Flow is $181.5 million in reporting currency. Analyst and extrapolated projections suggest Free Cash Flow of $259.8 million in 2035, with a path that includes $178.6 million in 2026 and $238.0 million in 2030, all in US dollars.

When these cash flows are discounted back to today using Simply Wall St's assumptions, the DCF model produces an estimated intrinsic value of about $57.45 per share. Compared to the current share price of $20.21, this implies the stock is 64.8% undervalued under this specific set of projections and inputs.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Simply Good Foods is undervalued by 64.8%. Track this in your watchlist or portfolio, or discover 888 more undervalued stocks based on cash flows.

Approach 2: Simply Good Foods Price vs Earnings

For a profitable company like Simply Good Foods, the P/E ratio is a useful way to think about what you are paying for each dollar of earnings. Investors typically accept a higher P/E when they expect stronger earnings growth or see lower risk, and a lower P/E when growth expectations are more modest or risks feel higher.

Simply Good Foods currently trades on a P/E of 20.61x. That sits close to the broader Food industry average of 20.73x and above the peer group average of 14.71x, so the stock is priced somewhat higher than many direct peers but roughly in line with the broader industry.

Simply Wall St's Fair Ratio for the company is 22.16x. This is a proprietary estimate of what a reasonable P/E could be, given factors such as earnings growth profile, industry, profit margins, market cap and company specific risks. Because it blends these elements together, it aims to be more tailored than a simple comparison with peers or an industry average.

Comparing the Fair Ratio of 22.16x with the current P/E of 20.61x suggests the shares are trading slightly below that tailored reference point.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Simply Good Foods Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Simply Good Foods with the numbers behind it.

A Narrative is your story about the company, written in financial terms, where you set assumptions for future revenue, earnings and margins and from that, arrive at a personal fair value estimate.

On Simply Wall St, Narratives live in the Community page and turn that story into a full forecast and valuation. They then line it up against the current share price so you can quickly see how your Fair Value compares.

The key benefit is that Narratives update automatically when fresh information such as news or earnings is added, so your valuation stays aligned with the latest data instead of sitting frozen in a spreadsheet.

For Simply Good Foods, one investor might build a Narrative that points to a Fair Value far above US$20.21. Another might set more cautious assumptions and arrive at a figure much closer to the current price, showing how different perspectives on the same company can lead to very different conclusions.

Do you think there's more to the story for Simply Good 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.