Shares of Europe's No. 1 frozen food company, Nomad Foods (NOMD +1.17%), are down 11% as of 11 a.m. ET after delivering fourth-quarter earnings. For the full year, Nomad saw sales decline 2%, gross profit margins dip 250 basis points, and adjusted earnings per share (EPS) slide 7%, as the company absorbed roughly $100 million in supply chain inflation without raising prices on consumers. Guidance wasn't much better, with the company forecasting organic sales to drop 2% to 5% and adjusted EPS to fall between 4% and 13% as it executes its "year of transition" under new Chief Executive Officer Dominic Brisby.

Expand

NYSE: NOMD

Nomad Foods

Today's Change

(1.17%) $0.12

Current Price

$10.42

Key Data Points

Market Cap

$1.5B

Day's Range

$10.05 - $10.45

52wk Range

$8.99 - $18.33

Volume

1.5M

Avg Vol

1.7M

Gross Margin

26.60%

Dividend Yield

6.60%

However, it isn't all doom and gloom for Nomad Foods. Full-year retail sell-out (sales from retailers to customers) rose 0.4%, indicating that consumer demand is stronger than the company's sales figures suggest. While Nomad has lost a bit of market share over the last couple of years, the frozen foods industry in Europe typically grows by 2% annually, creating a steady tailwind. Furthermore, Nomad remains the market leader in its niche, with its top 25 category and country product combinations (e.g., fish sticks in the U.K.) commanding an average market share 2.3 times that of its next-largest peer.

Image source: Getty Images.

Now trading with an EV/EBITDA ratio of just 7 -- and at 7 times free cash flow (FCF) -- Nomad looks deeply discounted to me. Management seems to agree. The company reduced its share count by 9% in 2025 as its stock price fell 44% over the past year. In addition to buying back stock on the cheap, CEO Brisby stated, "Ruben (CFO) and I are so confident in the value-creation potential that both of us intend to purchase a meaningful number of shares in the open market in the coming weeks."

I love to buy alongside management -- whether they're repurchasing shares or buying stock for themselves -- so management's clear signalling that the stock is cheap will keep me adding over time. Throw in a 6.3% dividend yield that only uses 42% of Nomad's FCF, and I'm happy to wait and see how this transition goes.