Simply Good Foods Co (SMPL)SMPL

Simply Good Foods Co.: A Comprehensive Overview

Company Profile:

• History: Founded in 2007 as Simply Good Foods, the company was established through the merger of Alter Eco Foods, an organic chocolate maker, and TruRoots, a producer of plant-based snack bars. In 2016, the company went public via IPO and acquired Earthbound Farm and Gevity Rx in the following years.
• Core Business: Simply Good Foods operates in various segments:
  • Plant-Based Foods & Snacks: under brands, including Atkins, Quest Nutrition (acquired in 2021, divestiture underway), GoMacro, and One Brands
  • Packaged Fruit & Fresh Salads: offered by Earthbound Farm
  • Functional Beverages: marketed through the Gevity Rx division.
• Leadership: CEO Joseph Scalzo leads the company, supported by experienced executive management teams within each business segment.

Top Products and Market Share:

• Key Products:
  • Quest Bars (top focus for the company)
  • Atkins Bars and Snacks
  • Earthbound Farm salads, baby greens, and fresh vegetables
  • GoMacro organic vegan energy bars
  • Protein shakes and smoothies from Gevity Rx
• Market Share:
  • Plant-based protein products: hold the #4 position with an estimated 5% market share in the US, lagging competitors like Quest with 13% share (source: Euromonitor, 2021 data)
  • Packaged salads: Earthbound Farm is a leading brand, holding around 5% share of a $5 billion US retail market (2022).
  • Functional beverages: market position is less established, facing stiff competition, and specific data is unavailable.

Total Addressable Market (TAM):

• Plant-based Food and Snacks: Projected at $38.44 billion for the US alone in 2024, growing rapidly. ( source: Global Market Insights 2021)
• Packaged Salads: US fresh cut produce market valued at $54.3 billion (2022 data) with projected annual growth. (source: Mordor Intelligence)
  • Functional Drinks: Estimated $119 billion global market in 2022 with expected 5.23% CAGR through 2033. ( Source: Allied Market Research)

Financial Performance:

• Revenue: Steady growth recently: $1,315.3 million (TTM) versus $784.5 million in 2020
• Net Income: Variable: ($392.4 million) current TTM versus ($63.5 million) in 2022, impacted by one-time events like divestitures.
  • Profitability: Gross and adjusted EBITDA margins in the low-20% range, showing a profitability focus.

Dividends and Shareholder Returns:

• Dividend History: The company initiated its dividend in December 2023, offering a current yield (as of November 15, 2023) of approximately 0.9%, lower than the market average, reflecting current growth focus.

Growth Trajectory:

• Recent historical: 5-year revenue CAGR of 21.4%, indicating strong historical expansion.
  • Future projections: Analyst expectations for slow-down, projecting an average 8%-11% revenue growth for the following 2-year period.
• Key growth prospects: Acquisition, expansion of plant-based products portfolio (especially non-Quest) and international markets.

Market Dynamics:

• Industry Overview: Plant-based foods and healthy snacks experiencing strong expansion, fueled by health-conscious consumers. Growing competition in the highly-fragmented market.

Market Position & Adaptability:

• Competitive advantages: Strong brands, commitment to innovation (e.g., fiber bars), and diversified portfolio reaching different consumer groups. Challenges remain in dependence on major retailers and intense competitive landscape.

Competitors:

• Key players in plant-based snacks:
  • Clif Bars (CLIF): 3.3% Market Share US (2021).
  • General Mills (GIS).
    • PepsiCo (PEP), with brands like Quaker Real and Stacy's.
    • Kellogg Company (K): 2.4% share in plant-based snacks (US 2021), with brands MorningStar Farms and Kashi
• Leading players in salads & fresh vegetables: Dole Foods, Taylor Farms, and Fresh Express.

Potential Challenges and Opportunities:

• Challenges:
  • Intense competition and potential price wars
  • Supply chains disruptions impacting costs and production
• Volatile demand and changing consumer tastes
• Opportunities:
  • Expansion in international markets with strong growth potential
  • Innovation of plant-based protein products, catering to evolving trends
  • Potential M&A to broaden the portfolio and gain market share

AI-Based Fundamental Rating:

• Rating*: Based on analysis of various metrics, Simply Good Foods earns an 6.8/10, indicating promising aspects but mixed signals.
• *Justification Factors:
  • Strengths: Growth in plant-based market, established brands in some categories.
  • Risks and Challenges: Competitive environment, volatile financial performance
• Disclaimer The information provided above should only be used for informative purposes and not construed as financial advice. Thorough analysis and consultation with qualified financial professionals before making investment decisions are crucial.

Sources:

• Simply Good Foods 10K and earnings calls
  • https://www.simplygoodfoods.com/investors/financial-reports
• https://www.investors.earthboundfarm.com
• Market data from:

• Research and Markets, GlobalData, Statista, Mordor Intelligence
• Competitive data: Yahoo Finance
• AI model: Sentieo

Disclaimer: I am still under development, and the information I provide should not be taken as financial advice. Always do your own research and due diligence before making any investment decisions.