Freshpet (FRPT) Stock Forecast & Price Target

Freshpet demonstrated strong financial performance in 4Q24, with an adjusted gross margin increase of 700 basis points to 48.1%, aligning with its long-term target for 2027. The company experienced a notable year-over-year household penetration growth of 15.5% and a consistent increase in buying rates, suggesting robust consumer demand amid the competitive $37 billion dog food category. Improvements in logistics, along with a substantial adjusted EBITDA margin of 20.1%, underscore Freshpet's operational efficiency and potential for sustained sales growth, particularly as production capacity expands and consumer awareness rises.

Freshpet has experienced significant challenges in the dog food category, which has faced heightened volatility with volume declines occurring in five of eight weeks year-to-date in 2025. Additionally, the company has observed a slowdown in the overall pet food category and a deceleration in compound annual growth rates (CAGRs), leading to a decision to maintain its 2027 financial goals without raising projections despite improvements in gross and operating margins. Finally, a comparison of the company's average buying rate indicates a 1% decline over the past year, which reflects a concerning trend in end demand and has contributed to a lower valuation multiple associated with anticipated sales growth.