Sprouts Farmers Market, Inc. (NASDAQ:SFM) defied analyst predictions to release its quarterly results, which were ahead of market expectations. The company beat forecasts, with revenue of US$1.9b, some 3.2% above estimates, and statutory earnings per share (EPS) coming in at US$0.94, 21% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Following the latest results, Sprouts Farmers Market's 13 analysts are now forecasting revenues of US$7.50b in 2024. This would be an okay 4.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 4.8% to US$3.40. Before this earnings report, the analysts had been forecasting revenues of US$7.39b and earnings per share (EPS) of US$3.10 in 2024. So the consensus seems to have become somewhat more optimistic on Sprouts Farmers Market's earnings potential following these results.

The consensus price target rose 25% to US$89.10, suggesting that higher earnings estimates flow through to the stock's valuation as well. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Sprouts Farmers Market at US$102 per share, while the most bearish prices it at US$62.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Sprouts Farmers Market's growth to accelerate, with the forecast 8.9% annualised growth to the end of 2024 ranking favourably alongside historical growth of 4.1% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Sprouts Farmers Market is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Sprouts Farmers Market following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Sprouts Farmers Market analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Sprouts Farmers Market , and understanding it should be part of your investment process.

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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.

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