4. Freshpet, Inc. (NASDAQ:FRPT)
Number of Hedge Fund Holders: 26
Freshpet, Inc. (NASDAQ:FRPT) is a New Jersey-based company that manufactures and markets natural fresh meals and treats for dogs and cats in the United States, Canada, and Europe. Freshpet, Inc. (NASDAQ:FRPT)’s Q3 2022 revenue of $151.3 million climbed 40.6% year-over-year, beating Wall Street estimates by $2.98 million. For full-year 2022, the company expects net sales of more than $575 million, an increase of approximately 35% from 2021. Freshpet, Inc. (NASDAQ:FRPT) is one of the best pet stocks to invest in.
On December 7, Piper Sandler analyst Michael Lavery raised the price target on Freshpet, Inc. (NASDAQ:FRPT) to $88 from $69 and kept an Overweight rating on the shares. The analyst believes Freshpet, Inc. (NASDAQ:FRPT)’s brand equity and product differentiation set it apart in the pet food sector, and he expects a “long runway of strong growth.” Freshpet, Inc. (NASDAQ:FRPT)’s total addressable market is meaningful, and increasing, said the analyst, who expects fresh pet food to continue gaining share.
According to Insider Monkey’s data, 26 hedge funds were long Freshpet, Inc. (NASDAQ:FRPT) at the end of September 2022, compared to 23 funds in the earlier quarter. The collective stakes in Q3 increased to $541.2 million from $184 million in Q2 2022.
Here is what Wasatch Small Cap Growth Fund has to say about Freshpet, Inc. (NASDAQ:FRPT) in its Q4 2021 investor letter:
“The greatest detractor from Fund performance for the fourth quarter was Freshpet, Inc. (FRPT). The company is the undisputed leader in refrigerated pet food, which we consider a “growth staple.” People seem willing to prioritize the health of their pets under almost any circumstances. Having said that, the stock was down because the company lowered projections for sales and earnings due to rising costs and shortages of labor and materials. Supply-chain challenges have also disrupted Freshpet’s ability to expand manufacturing capacity and get food into stores. Marketing activities have been curtailed because the company is having trouble meeting existing demand. We take some comfort in the fact that Freshpet’s difficulties are supply-related rather than demand related. Over time, we believe that supply-chain challenges will be resolved and that Freshpet will resume its growth trajectory. In terms of competition, there are some smaller players that are trying to challenge Freshpet’s dominant brand name and footprint in stores. But we think those smaller players are even more vulnerable to today’s supply chain challenges. In fact, the current difficult environment may actually strengthen Freshpet’s competitive position and help make the company even more dominant over time. Additionally, we think Freshpet’s pricing power and margins will improve substantially as the company becomes larger.”
