Critical Review: Sprouts Farmers Market (NASDAQ:SFM) versus BBB Foods (NYSE:TBBB)

Sprouts Farmers Market (NASDAQ:SFM) and BBB Foods (NYSE:TBBB) are both retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations for Sprouts Farmers Market and BBB Foods, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sprouts Farmers Market	0	8	3	0	2.27
BBB Foods	0	5	3	0	2.38

Sprouts Farmers Market presently has a consensus price target of $115.40, suggesting a potential downside of 19.55%. BBB Foods has a consensus price target of $30.57, suggesting a potential downside of 6.57%. Given BBB Foods’ stronger consensus rating and higher possible upside, analysts plainly believe BBB Foods is more favorable than Sprouts Farmers Market.

Profitability

This table compares Sprouts Farmers Market and BBB Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sprouts Farmers Market	4.73%	28.24%	10.18%
BBB Foods	N/A	N/A	N/A

Earnings and Valuation

This table compares Sprouts Farmers Market and BBB Foods”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sprouts Farmers Market	$6.84 billion	2.10	$258.86 million	$3.46	41.46
BBB Foods	$2.49 billion	1.47	-$17.30 million	N/A	N/A

Sprouts Farmers Market has higher revenue and earnings than BBB Foods.

Insider & Institutional Ownership

8.4% of BBB Foods shares are held by institutional investors. 1.1% of Sprouts Farmers Market shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Sprouts Farmers Market beats BBB Foods on 7 of the 10 factors compared between the two stocks.

About Sprouts Farmers Market

Sprouts Farmers Market, Inc., together with its subsidiaries, engages in the retailing of fresh, natural, and organic food products under the Sprouts brand in the United States. It offers perishable product categories, including fresh produce, meat and meat alternatives, seafood, deli, bakery, floral, and dairy and dairy alternatives; and non-perishable product categories, such as grocery, vitamins and supplements, bulk items, frozen foods, beer and wine, and natural health and body care. Sprouts Farmers Market, Inc. was founded in 1943 and is headquartered in Phoenix, Arizona.

About BBB Foods

BBB Foods Inc., through its subsidiaries, operates a chain of grocery retail stores in Mexico. It offers household cleaning, personal hyenine, cosmetics and beauty, pharmacy, and general merchandise products, as well as jellies and desserts, foods and drinks, pet supplies, coffee, tea, chocolates, breads, dry and frozen foods, snacks and sweets, and toilet papers and napkins. The company also provides branded, private label, and spot products. It serves low-to-middle income households through online channels. BBB Foods Inc. was incorporated in 2004 and is headquartered in Mexico City, Mexico.