Freshpet (FRPT) Stock Forecast & Price Target

Freshpet has demonstrated a strong financial performance with an adjusted gross margin improvement of 700 basis points to 48.1% in the fourth quarter of 2024, aligning with its long-term target for 2027. The company also reported a notable 15.5% year-over-year increase in household penetration, alongside a 6% year-over-year increase in buying rates, signaling robust consumer interest and a strengthening market position. Additionally, Freshpet's adjusted EBITDA margin increased by 550 basis points to 20.1%, highlighting efficiency gains despite higher adjusted selling, general, and administrative expenses, which paves the way for potential growth through enhanced production capacity and future M&A opportunities.

Freshpet's stock outlook is negatively impacted by a decline in the dog food category, where volumes have decreased in five of eight weekly periods year-to-date in 2025, indicating heightened market volatility. Additionally, the company's sales growth has been slowing, as evidenced by decelerating compound annual growth rates (CAGRs) and a 1% decline in the average buying rate for the premium food offerings over the past year. The overall downturn in the pet food category has resulted in Freshpet not raising its 2027 sales goals, reflecting concerns about end demand and necessitating a lower valuation multiple in light of recent scanner data trends.