What Happened?

Shares of pet food company Freshpet (NASDAQ:FRPT) jumped 7.9% in the afternoon session after Jefferies upgraded the stock's rating from Hold to Buy and assigned a price target of $150, which implied a potential 40% upside, citing its attractive valuation. The firm added, "...Valuation is at a five-year low; we think FRPT shares are worth 50% above where it is trading."

After the initial pop the shares cooled down and closed the day at $107.58, up 7.2% from previous close.

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What The Market Is Telling Us

Freshpet’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 4 days ago when the stock dropped 19.5% on the news that the company reported disappointing fourth-quarter results: its gross margin missed significantly, and its full-year revenue guidance fell short of Wall Street's estimates.

On the other hand, Freshpet blew past analysts' EBITDA expectations. The company also guided for full-year EBITDA above Wall Street's estimates. Still, this was a softer quarter due to the worse-than-anticipated top-line momentum for 2025.

Freshpet is down 25.5% since the beginning of the year, and at $107.59 per share, it is trading 33.8% below its 52-week high of $162.59 from January 2025. Investors who bought $1,000 worth of Freshpet’s shares 5 years ago would now be looking at an investment worth $1,460.

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