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Analyst: Freshpet Still a Top Dog Despite Earnings Miss

By Rhian Hunt - Feb 23, 2021 at 1:37PM

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The company also launched a $300 million follow-on stock offering yesterday evening.

When pet food maker Freshpet (FRPT -0.99%) reported its fourth-quarter and full-year results for 2020 yesterday, it reported a loss of $0.08 per share, versus the $0.07 earnings per share (EPS) analyst consensus expected, Zacks Equity Research reports. Falling $0.15 short of Wall Street's expectations, the company's Q4 net loss amounts to $3.3 million, $7.9 million less than the $4.6 million net income registered in Q4 2019.

On a more positive note, net sales jumped 28.5% year over year, reaching $84.5 million and matching analyst predictions. Approximately the same results of net sales growth and a net loss are reported for Freshpet's full fiscal 2020. CEO Billy Cyr says the company "produced our fourth consecutive year of accelerating growth in 2020" and now expects to have 11 million households as customers by 2025 rather than the originally predicted 8 million, a 37% increase.

A cat and dog eating side by side from a lime green bowl.

Image source: Getty Images.

Among major analysts, Oppenheimer isn't bothered by the earnings miss and still thinks Freshpet is the cat's meow. In a research note released this morning, it says it looks "very favorably upon FRPT's global growth prospects" and cites the pet food company's "buying rate within the US, [...] launch of more innovative products, and international expansion" as reasons the stock is still a "top pick." Freshpet has shown plenty of momentum in recent years, including a 2,000% return over the past half-decade, potentially lending weight to Oppenheimer's optimism. 

Besides reporting its results yesterday, Freshpet also announced a follow-on stock offering after stock market close, consisting of $300 million worth of common stock. The offering's underwriters have the option to buy up to $45 million in additional shares. Freshpet's stock is currently down 9% in early afternoon trading.

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