| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 38.66 | 106 |
| Intrinsic value (DCF) | 8.36 | -55 |
| Graham-Dodd Method | 17.23 | -8 |
| Graham Formula | 17.22 | -8 |
The Simply Good Foods Company (NASDAQ: SMPL) is a leading consumer packaged food and beverage company specializing in health-focused snacks and meal replacements. Operating under the Atkins and Quest brands, the company offers a diverse product portfolio, including protein bars, shakes, sweet and salty snacks, and frozen meals. With a strong presence in North America and international markets, SMPL distributes through mass merchandise, grocery, drug, club, and convenience stores, as well as e-commerce platforms like Amazon and its brand websites. Headquartered in Denver, Colorado, the company capitalizes on the growing demand for low-carb, high-protein, and better-for-you food options. As part of the $1.3 trillion global packaged food industry, SMPL is well-positioned in the health and wellness segment, benefiting from trends like weight management and functional nutrition. Its asset-light model and strong brand equity make it a key player in the competitive consumer defensive sector.
The Simply Good Foods Company presents a compelling investment case with its strong brand portfolio (Atkins, Quest), consistent revenue growth ($1.33B in FY2024), and healthy profitability (net income of $139M). The company operates in the resilient consumer defensive sector with a low beta (0.723), suggesting lower volatility than the broader market. Its focus on high-growth categories like protein snacks and meal replacements aligns with consumer health trends. However, risks include intense competition in the crowded better-for-you food space, reliance on third-party manufacturers, and exposure to inflationary input costs. The lack of dividends may deter income-focused investors, but strong operating cash flow ($215.7M) and manageable debt ($403M) support growth initiatives. Valuation at ~$3.5B market cap appears reasonable given its niche positioning and growth potential.
Simply Good Foods competes in the highly fragmented better-for-you packaged food segment, differentiating itself through strong brand equity in low-carb (Atkins) and high-protein (Quest) categories. The company's competitive advantage stems from: 1) Brand recognition - Atkins is synonymous with low-carb diets, while Quest dominates the protein snack space; 2) Multi-channel distribution spanning retail and e-commerce; 3) Product innovation in high-growth categories like protein chips and frozen meals; 4) Asset-light model that enhances margins. However, it faces pressure from larger CPG companies (e.g., Mondelez, Hershey) expanding into health-focused snacks and private label alternatives. SMPL's $1.3B revenue scale is modest compared to industry giants, limiting bargaining power with retailers. Its focus on North America (vs. global peers) presents both concentration risk and growth opportunity. The company's R&D focus on taste and texture in low-carb products provides some insulation from competition, but maintaining premium pricing requires continuous innovation as competitors replicate successful formulations. E-commerce (~10% of sales) is a relative strength but trails digitally-native brands.