What Happened?
Shares of pet food company Freshpet (NASDAQ: FRPT) jumped 5.3% in the afternoon session after Piper Sandler reiterated its 'Overweight' rating and an $87 price target on the stock, implying significant potential upside.
The investment firm's confidence was bolstered after hosting Freshpet's CFO, John O'Connor. Piper Sandler noted that concerns about competition are likely overstated. The firm expects the pet food company's focused marketing and distribution strategies to effectively attract its most valuable customers, supporting continued growth.
Additionally, new production technology, which is in the early stages of use, is anticipated to improve profit margins and lead to savings on large-scale purchases. Piper Sandler concluded that the shares are attractively priced at their current levels.
After the initial pop, the shares cooled down to $56.98, up 4.6% from the previous close.
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What Is The Market Telling Us
Freshpet’s shares are very volatile and have had 29 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock gained 12.1% on the news that the company reported third-quarter financial results that significantly surpassed Wall Street's profit expectations.
Net sales for the quarter rose 14% year-over-year to $288.8 million, exceeding analyst forecasts. The company's earnings per share (EPS) came in at $1.86, which was substantially higher than the average analyst forecast of $0.42. This large increase in profit was primarily due to a one-time deferred tax benefit of $77.9 million.
Freshpet also reported strong volume growth of 12.9% and an improved operating margin, which rose to 8.6% from 4.7% in the same period last year. The company generated positive free cash flow of $31.56 million for the quarter.
Freshpet is down 5.3% since the beginning of the year, and at $56.98 per share, it is trading 33.4% below its 52-week high of $85.50 from March 2026. Investors who bought $1,000 worth of Freshpet’s shares 5 years ago would now be looking at only $349.00.
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