SFM gets a fundamental rating of 8 out of 10. The analysis compared the fundamentals against 38 industry peers in the Consumer Staples Distribution & Retail industry. SFM gets an excellent profitability rating and is at the same time showing great financial health properties. SFM is evaluated to be cheap and growing strongly. This does not happen too often! With these ratings, SFM could be worth investigating further for value and growth and quality investing!.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year SFM was profitable.
SFM had a positive operating cash flow in the past year.
In the past 5 years SFM has always been profitable.
Each year in the past 5 years SFM had a positive operating cash flow.

1.2 Ratios

SFM's Return On Assets of 12.79% is amongst the best of the industry. SFM outperforms 89.47% of its industry peers.
Looking at the Return On Equity, with a value of 35.79%, SFM belongs to the top of the industry, outperforming 92.11% of the companies in the same industry.
With an excellent Return On Invested Capital value of 15.78%, SFM belongs to the best of the industry, outperforming 94.74% of the companies in the same industry.
SFM had an Average Return On Invested Capital over the past 3 years of 11.53%. This is significantly below the industry average of 28.24%.
The 3 year average ROIC (11.53%) for SFM is below the current ROIC(15.78%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	12.79%
ROE	35.79%
ROIC	15.78%

ROA(3y)8.91%

ROA(5y)9.07%

ROE(3y)25.43%

ROE(5y)26.87%

ROIC(3y)11.53%

ROIC(5y)11.58%

1.3 Margins

With an excellent Profit Margin value of 5.93%, SFM belongs to the best of the industry, outperforming 89.47% of the companies in the same industry.
In the last couple of years the Profit Margin of SFM has grown nicely.
SFM has a Operating Margin of 7.84%. This is amongst the best in the industry. SFM outperforms 89.47% of its industry peers.
In the last couple of years the Operating Margin of SFM has grown nicely.
SFM's Gross Margin of 38.83% is amongst the best of the industry. SFM outperforms 84.21% of its industry peers.
In the last couple of years the Gross Margin of SFM has grown nicely.

		Industry Rank	Sector Rank
OM	7.84%
PM (TTM)	5.93%
GM	38.83%

OM growth 3Y6.47%

OM growth 5Y10.94%

PM growth 3Y7.19%

PM growth 5Y13.18%

GM growth 3Y1.71%

GM growth 5Y2.53%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so SFM is still creating some value.
SFM has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, SFM has less shares outstanding
SFM has a better debt/assets ratio than last year.

2.2 Solvency

SFM has an Altman-Z score of 4.54. This indicates that SFM is financially healthy and has little risk of bankruptcy at the moment.
SFM has a Altman-Z score of 4.54. This is in the better half of the industry: SFM outperforms 63.16% of its industry peers.
SFM has a debt to FCF ratio of 0.12. This is a very positive value and a sign of high solvency as it would only need 0.12 years to pay back of all of its debts.
SFM has a better Debt to FCF ratio (0.12) than 97.37% of its industry peers.
A Debt/Equity ratio of 0.04 indicates that SFM is not too dependend on debt financing.
With an excellent Debt to Equity ratio value of 0.04, SFM belongs to the best of the industry, outperforming 86.84% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.04
Debt/FCF	0.12
Altman-Z	4.54

ROIC/WACC1.78

WACC8.86%

2.3 Liquidity

A Current Ratio of 1.05 indicates that SFM should not have too much problems paying its short term obligations.
SFM has a worse Current ratio (1.05) than 60.53% of its industry peers.
SFM has a Quick Ratio of 1.05. This is a bad value and indicates that SFM is not financially healthy enough and could expect problems in meeting its short term obligations.
SFM has a Quick ratio (0.53) which is comparable to the rest of the industry.
SFM does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

		Industry Rank	Sector Rank
Current Ratio	1.05
Quick Ratio	0.53

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

SFM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 49.42%, which is quite impressive.
SFM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 24.64% yearly.
The Revenue has grown by 16.60% in the past year. This is quite good.
Measured over the past years, SFM shows a small growth in Revenue. The Revenue has been growing by 6.50% on average per year.

EPS 1Y (TTM)49.42%

EPS 3Y21.43%

EPS 5Y24.64%

EPS Q2Q%34.07%

Revenue 1Y (TTM)16.6%

Revenue growth 3Y8.16%

Revenue growth 5Y6.5%

Sales Q2Q%13.09%

3.2 Future

SFM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.28% yearly.
The Revenue is expected to grow by 10.63% on average over the next years. This is quite good.

EPS Next Y41.5%

EPS Next 2Y24.47%

EPS Next 3Y20.51%

EPS Next 5Y16.28%

Revenue Next Year14.66%

Revenue Next 2Y12.38%

Revenue Next 3Y11.49%

Revenue Next 5Y10.63%

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 13.72, which indicates a correct valuation of SFM.
Compared to the rest of the industry, the Price/Earnings ratio of SFM indicates a somewhat cheap valuation: SFM is cheaper than 76.32% of the companies listed in the same industry.
SFM's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.32.
With a Price/Forward Earnings ratio of 12.17, SFM is valued correctly.
Based on the Price/Forward Earnings ratio, SFM is valued cheaply inside the industry as 81.58% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 25.57. SFM is valued rather cheaply when compared to this.

		Industry Rank	Sector Rank
PE	13.72
Fwd PE	12.17

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, SFM is valued a bit cheaper than 71.05% of the companies in the same industry.
SFM's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. SFM is cheaper than 73.68% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	15.09
EV/EBITDA	7.99

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
SFM has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as SFM's earnings are expected to grow with 20.51% in the coming years.