Is Sprouts Farmers Market, Inc. overvalued or undervalued?

As of 7 July 2025, the valuation grade for Sprouts Farmers Market, Inc. has moved from attractive to expensive, indicating a shift towards overvaluation. The company is currently considered overvalued, with a P/E ratio of 36, a Price to Book Value of 12.85, and an EV to EBITDA ratio of 18.79. In comparison, peers such as Albertsons Cos., Inc. have a P/E of 9.39, while Grocery Outlet Holding Corp. shows a P/E of 28.34, highlighting that Sprouts is trading at a significant premium relative to its peers.
Despite its strong ROCE of 51.49% and ROE of 35.40%, the high valuation ratios suggest that investors may be pricing in excessive growth expectations. Over the past year, Sprouts has returned 17.06%, slightly underperforming the S&P 500's return of 17.14%, which further supports the notion that the stock may be overvalued given its recent performance relative to the broader market.