What Happened?

Shares of pet food company Freshpet (NASDAQ:FRPT) jumped 12.8% in the afternoon session after the company reported a "beat and raise" quarter. Third-quarter results exceeded Wall Street's sales, EPS, and EBITDA estimates. Interestingly, the company delivered the 25th consecutive quarter of +25% year on year sales growth, highlighting management's ability to deliver on its growth strategy while meeting the demand of its target audience. Looking ahead, the strong sales and profitability enabled the company to raise both full-year revenue and EBITDA guidance, as both metrics came in ahead of consensus. Overall, we think this was a strong quarter.

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What The Market Is Telling Us

Freshpet’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. Moves this big are rare for Freshpet and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 8 months ago when the stock gained 18% on the news that the company reported fourth-quarter results that blew past analysts' EPS expectations. Its revenue also outperformed Wall Street's estimates as it saw improved momentum in the pet food sector. Notably, 2023 marked the sixth consecutive year of robust revenue growth, consistently exceeding 25%. 

Looking ahead, management's EBITDA guidance of $105 million for the full year 2024 came in ahead of expectations, and it noted the company reached an inflection point in terms of profitability. Overall, this was a really good quarter that should please shareholders.

Freshpet is up 74.5% since the beginning of the year, and at $152.48 per share, has set a new 52-week high. Investors who bought $1,000 worth of Freshpet’s shares 5 years ago would now be looking at an investment worth $3,126.

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