Freshpet (FRPT) Stock Forecast & Price Target

Freshpet's financial performance reflects a positive trajectory, highlighted by an increase in adjusted gross margin to 48.1% for 4Q24, aligning with long-term targets. The company also achieved a 15.5% year-over-year increase in household penetration, indicating robust consumer interest, while maintaining the highest market share of the fresh/frozen category at 96%. Additionally, Freshpet's adjusted EBITDA margin improved to 20.1%, driven by higher gross margins, suggesting effective cost management and operational efficiency that positions the company well for future growth.

Freshpet's stock outlook appears negative due to significant volatility in the dog food category, with sales volumes declining in five of the first eight weeks of 2025. Additionally, the company's recent performance shows a slowdown in overall pet food sales, contributing to a decision not to raise its 2027 sales goals despite an increase in gross margin and operating margin targets. Furthermore, a decline in the average buying rate within its most valuable product group and weakened scanner data, which serves as a demand indicator, suggests a sustained challenge in achieving anticipated sales growth.