Freshpet Earnings: Robust Growth and Margin Expansion, but Market Pricing in Perfection

No-moat Freshpet reported impressive full-year 2023 net sales growth of 29% to $767 million, ahead of its guidance for $755 million and our forecast for $759 million. We were equally impressed that the adjusted EBITDA margin widened 530 basis points to 8.7%, 60 basis points better than our forecast. We expect to raise our fair value estimate by a mid-single-digit percentage, reflecting better profitability and lower capital spending partially offset by higher media spending. Shares were up 19% intraday on the results, leaving them well above our fair value.