MeritValue

Sprouts Farmers Market, Inc.

SFMdata completeness 88%15 fiscal years on file
The thesis, from the filings

Sprouts Farmers Market, Inc. earns about 31% on invested capital, far above its ~9% cost of capital, and has bought back 15% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $27.42 and $195.56 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2022FY 2023FY 2023FY 2024FY 2025
Revenue$6.1B1$6.4B2$6.84B3$7.72B3$8.81B3
Net income$244.2M4$261.2M5$258.9M6$380.6M6$523.7M6
Operating cash flow$364.8M7$371.3M8$465.1M9$645.2M9$716M9
Capital expenditure$102.4M10$124M11$225.3M12$230.4M12$248.3M12
Free cash flow (derived)$262.4M7$247.3M8$239.8M9$414.8M9$467.7M9
Total debt$250M13$250M14$125M15——
Cash & equivalents$245.3M16$293.2M17$201.8M18$265.2M19$257.3M19
Diluted shares116.1M109.1M103.4M101.4M98.7M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$142.15
your share of equity
Profit it earned you last year
$53.05
Free cash flow it threw off
$47.39
Debt you’d be carrying
—

10 shares is a claim on $142.15 of net worth that earned you $53.05 and generated $47.39 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
31% avg · 5y
FY22 24%FY23 25%FY23 24%FY24 36%FY25 46%

It earned about 31% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−15% shares · 5y

Share count is down 15% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has fallen 50% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $27.42 and $195.56 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$195.56
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth16.5%
  • fcfBase$414.8M
DCF · Growth Exit 5Y
$122.11
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth16.5%
  • fcfBase$414.8M
Earnings Power Value
$27.42
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$261.2M
  • growthAssumed0.0%
Graham Number
$41.21
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years16.5%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $122.11
The three cases
Bear0.0%$62.66
Base16.5%$122.11
Bull20.0%$139.63

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 16.5%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2022-01-02 · accession 0000950170-24-018768 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2023-01-01 · accession 0001575515-25-000011 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001575515-26-000008 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2022-01-02 · accession 0000950170-24-018768 (NetIncomeLoss)
  5. 10-K · period ending 2023-01-01 · accession 0001575515-25-000011 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001575515-26-000008 (NetIncomeLoss)
  7. 10-K · period ending 2022-01-02 · accession 0000950170-24-018768 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2023-01-01 · accession 0001575515-25-000011 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001575515-26-000008 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2022-01-02 · accession 0000950170-24-018768 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2023-01-01 · accession 0001575515-25-000011 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001575515-26-000008 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2022-01-02 · accession 0000950170-22-001976 (LongTermDebt)
  14. 10-K · period ending 2023-01-01 · accession 0000950170-23-005723 (LongTermDebt)
  15. 10-K · period ending 2023-12-31 · accession 0000950170-24-018768 (LongTermDebt)
  16. 10-K · period ending 2022-01-02 · accession 0000950170-23-005723 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2023-01-01 · accession 0000950170-24-018768 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2023-12-31 · accession 0001575515-25-000011 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2024-12-29 · accession 0001575515-26-000008 (CashAndCashEquivalentsAtCarryingValue)