Can Simply Good Foods stock perform further in 2021?
The Simply Good Foods Company (NASDAQ: SMPL) is an American food company. The company manufactures and sells products such as nutritional bars, ready-to-drink shakes, sweet and salty snacks, and confectionery. The company’s portfolio of brands includes Atkins, Quest and Atkins Endulge.
On March 18, Simply Good Foods announced that they would release financial results for the second quarter of fiscal 2021 on Wednesday, April 7, ahead of the stock exchange opening. SMPL has exceeded earnings expectations in all four of the most recently published earnings reports. However, this only resulted in one positive post-profit move, a 4.7% drop in July.
For the second quarter of 2020, Simply Good Foods beat analysts’ estimates by a margin of $ 0.06 and reported earnings per share (EPS) of $ 0.23. For the third quarter of 2020, SMPL increased its earnings per share to $ 0.26, beating expectations with a significant margin of $ 0.11. For the following quarter, Simply Good Foods saw earnings decline to $ 0.22 per share. However, the company still beat estimates by a margin of $ 0.06. For the first quarter of 2021, SMPL reported earnings per share of $ 0.29, beating expectations with a margin of $ 0.08. The company has not suffered any loss in the profit pit lately.
SMPL is up 67% year over year, hitting a record high of $ 35.25 on March 11th. And while stocks have pulled back a few since then, their 80-day moving average has contained the damage. As we usually see with companies growing their sales so quickly, SMPL is currently trading at a high price / earnings ratio of 50.49 and a price / earnings ratio of 28.65.
In fiscal 2020, Simply Good Foods increased sales by 56%, or approximately $ 290 million, and ended with total sales of $ 816 million for the year. SMPL has only continued its revenue growth this fiscal year, posting a 4% year-over-year increase for the first quarter of 2021. More importantly, Simply Good Foods increased its net income by 81% in the past quarter.
This significant growth signaled a change in the growth path of SMPL net income. The company’s net income declined 27% in fiscal 2020 and declined 50% compared to fiscal 2018. However, Simply Good Foods net income is $ 62 million for the past 12 months, down from $ 34.7 million in fiscal 2020. Overall, Simply Good Foods stock is best as a long-term growth game.