SFM Should I Buy
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Sprouts Farmers Market Inc (SFM) is not a strong buy at this moment for a beginner, long-term investor with $50,000-$100,000 available for investment. While the company has shown strong financial growth in the latest quarter and has long-term potential due to its exposure to healthy eating trends, the technical indicators are bearish, and analysts have recently lowered price targets, citing near-term challenges. Additionally, there are no significant positive trading signals or catalysts to justify immediate action.
The technical indicators for SFM are bearish. The MACD is below zero and negatively contracting, the RSI is neutral at 46.809, and the moving averages indicate a bearish trend (SMA_200 > SMA_20 > SMA_5). The stock is trading near its pivot level of 67.965, with resistance at 70.544 and support at 65.387.
Strong financial performance in Q3 2025, with revenue up 13.09% YoY, net income up 31.12% YoY, and EPS up 34.07% YoY.
Long-term exposure to healthy eating trends and a differentiated position in natural and organic groceries.
Analysts expect a recovery in the second half of 2026.
Analysts have recently lowered price targets, citing near-term challenges such as food disinflation, reduced government benefits, and soft same-store sales in the first half of
Bearish technical indicators and lack of strong trading signals.
Increased competition in the retail grocery space from players like Uber Eats and Instacart.
In Q3 2025, Sprouts Farmers Market reported strong financial growth: Revenue increased by 13.09% YoY to $2.2 billion, net income rose by 31.12% YoY to $120.1 million, EPS grew by 34.07% YoY to 1.22, and gross margin improved by 1.65% YoY to 36.91%.
Recent analyst activity has been mixed but leans cautious. Wells Fargo lowered the price target to $110 from $135, citing a tough near-term outlook but potential recovery in the second half of 2026. Evercore ISI lowered the price target to $83 from $130, citing 8%-12% downside into earnings and a challenging Q4. Goldman Sachs lowered the price target to $130 from $152 but maintained a Buy rating, citing long-term growth potential. Deutsche Bank resumed coverage with a Hold rating and an $88 price target, highlighting mixed conditions for 2026.
