In This Article:
What Happened?
Shares of pet food company Freshpet (NASDAQ:FRPT) fell 19.5% in the afternoon session after the company reported disappointing fourth-quarter 2024 results: its gross margin missed significantly, and its full-year revenue guidance fell short of Wall Street's estimates. On the other hand, Freshpet blew past analysts' EBITDA expectations. The company also guided for full-year EBITDA above Wall Street's estimates. Still, this was a softer quarter due to the worse-than-anticipated top-line momentum for 2025.
The shares closed the day at $106.17, down 18.8% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Freshpet? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Freshpet’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for Freshpet and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock gained 18% on the news that the company reported fourth-quarter results that blew past analysts' EPS expectations. Its revenue also outperformed Wall Street's estimates as it saw momentum in the pet food sector. Notably, 2023 marked the sixth consecutive year of robust revenue growth, consistently exceeding 25%. Looking ahead, management's EBITDA guidance of $105 million for the full year 2024 came in ahead of expectations, and it noted the company reached an inflection point this quarter in terms of profitability. Overall, this was a really good quarter that should please shareholders.
Freshpet is down 26.3% since the beginning of the year, and at $106.39 per share, it is trading 34.6% below its 52-week high of $162.59 from January 2025. Investors who bought $1,000 worth of Freshpet’s shares 5 years ago would now be looking at an investment worth $1,392.
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