SMPL Stock Forecast & Price Target

Simply Good Foods Co is projected to achieve an 8.5% reported sales growth in FY25, bolstered by over 2% organic sales growth driven primarily by a robust 12% increase in the Quest brand. Despite a 12% decline in the Atkins segment, the strength of the Quest brand is expected to offset this downturn, highlighting the company's resilience in its product offerings. Looking ahead, the outlook for FY26 suggests further organic growth will be supported by the OWYN acquisition and improved performance from the Atkins brand, alongside continued momentum from Quest.

Simply Good Foods is facing a negative outlook primarily due to an anticipated decline in gross margins, projected to decrease by 210 basis points to 36.9% in FY25. The company's performance is uneven across its brands, with Quest expected to grow by 11.5%, while Atkins is forecasted to decline by 14% due to the impacts of reduced promotional activity and ongoing distribution losses. Additionally, the weakening sales trends for Atkins raise concerns about further revenue declines, leading to reductions in FY26 estimates, despite the overall portfolio being considered undervalued based on current trading metrics.