Would Mark Minervini consider SPROUTS FARMERS MARKET INC (NASDAQ:SFM) a top stock pick?

Our stock screener has spotted SPROUTS FARMERS MARKET INC (NASDAQ:SFM) as a stocks which checks several boxes as specified by Mark Minervini. We will dive into an analysis below.

Checking the Minervini Trend Template.

SFM checks all the boxes when evaluating the Minervini Trend Template. This is a set of basic technical criteria to identify stocks in strong uptrends:

• ✔ Relative Strength is above 70.
• ✔ Current price is within 25% of it's 52-week high.
• ✔ Current price is at least 30% above it's 52-week low.
• ✔ The current price is above the 50-, 150- and 200-day SMA price line.
• ✔ The SMA(200) is trending upwards.
• ✔ The SMA(150) is above the SMA(200)
• ✔ The SMA(50) is above the SMA(150) and the SMA(200)

ChartMill's Evaluation of Growth

Every stock receives a High Growth Momentum Rating (HGM) from ChartMill, ranging from 0 to 10. This rating assesses various growth and profitability aspects, including historical and projected EPS and revenue growth. SFM boasts a 6 out of 10:

Earnings Momentum

• SFM has shown positive momentum in its earnings per share (EPS) on a quarter-to-quarter (Q2Q) basis, with a 61.61% increase. This reflects the company's successful execution of its business strategies and its commitment to delivering improved financial results.
• Accelerating EPS growth for SFM: the current Q2Q growth of 61.61% exceeds the previous quarter Q2Q growth of 61.22%.
• Sales acceleration happened 3 quarters in a row.
• SFM has achieved 49.83% growth in EPS over the past 12 months, reflecting a sustained improvement in earnings performance.
• With impressive quarter-to-quarter (Q2Q) revenue growth of 18.72%, SFM showcases its ability to generate increased sales and revenue. This growth indicates the company's strong customer demand and its effective business strategies.
• Accelerating Sales growth for SFM: the current Q2Q growth of 18.72% exceeds the previous quarter Q2Q growth of 17.53%.
• Sales growth accelerated for 3 quarters in a row.
• The average next Quarter EPS Estimate for SFM has experienced a 21.06% change in the last 3 months, reflecting evolving expectations by analysts regarding the company's EPS performance.
• With a track record of beating EPS estimates in the last 4 quarters, SFM showcases its consistent ability to deliver earnings surprises. This reflects the company's strong execution and its competitive position in the market.

Profitability & Financial Strength

• SFM has shown positive growth in its operating margin over the past year, indicating improved operational efficiency. This growth highlights the company's ability to effectively manage costs and maximize profitability.
• With positive growth in its profit margin over the past year, SFM showcases its ability to improve profitability.
• The free cash flow (FCF) of SFM has seen steady growth over the past year, indicating enhanced cash flow generation and financial health. This trend underscores the company's effective capital management and its ability to generate sustainable cash flows.
• SFM has a healthy Return on Equity(ROE) of 34.67%. This demonstrates the company's efficient utilization of capital and indicates its commitment to driving profitability.
• Maintaining a Debt-to-Equity ratio of 0.01, SFM demonstrates a conservative financial approach. This signifies the company's focus on minimizing debt burdens while preserving a solid equity position.

Strong Market Performance

• SFM has maintained a healthy Relative Strength (RS) over the analyzed period, with a current 97.49 rating. This demonstrates the stock's ability to outperform its peers and indicates its competitive positioning.

Why is SFM a setup?

ChartMill also provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the extent of consolidation in the stock based on multiple short-term technical indicators. Currently, SFM has a 6 as its setup rating:

Although SFM has an excellent technical rating, the quality of the presented setup is not ideal at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first.

Our latest full technical report of SFM contains the most current technical analsysis.

Concluding

Our High Growth Momentum + Trend Template screen will find you more ideas which meet the Minervini criteria.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.