Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 26 Feb, 26 | SMPL | Buy | USD 16.87 | USD 17.72 | USD 19.0 | 12 days | Closed |
11.08%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
The Simply Good Foods Company, a consumer-packaged food and beverage company, engages in the development, marketing, and sale of snacks and meal replacements, and other products in North America and internationally. The company offers protein bars, ready-to-drink shakes, sweet and salty snacks, cookies, muffins, protein chips and crackers, protein powders, and recipes under the Quest, Atkins, and OWYN brand names. It also provides confectionery products, such as full-size and mini peanut butter cups, brownies, caramel candy bites, chocolatey coated peanut candies, and caramel candy bars. In addition, the company licenses certain products that contain its brands and logos; and distributes its products to various retail channels, such as mass merchandise, grocery and drug stores, club and convenience stores, gas stations, and other channels. It also sells its products through e-commerce channels, including questnutrition.com, atkins.com, liveowyn.com, amazon.com and others. The company was incorporated in 2017 and is headquartered in Denver, Colorado.
Robust OWYN Retail Takeaway Growth: Q1 FY26 OWYN retail takeaway rose 17.8%, highlighting strong consumer demand despite temporary inventory headwinds
Improved Operating Cash Flow: Q1 FY26 operating cash flow increased to USD 50.1 million, compared to USD 32.0 million in Q1 FY25, reflecting improved working capital management
Decline in Net Income: Q1 FY26 net income fell 33.7% to USD 25.3 million versus USD 38.1 million in Q1 FY25
Gross Margin Compression: Q1 FY26 gross margin declined to 32.3% from 38.2% in Q1 FY25, a contraction of 590 basis points, primarily due to inflation and tariff pressures
The Company’s investment profile remains exposed to sustained input cost inflation, tariff pressures, and continued weakness in the Atkins brand, which may delay margin recovery and constrain near-term earnings growth despite strong performance from Quest and OWYN
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 16.87 | 15.0 | 17.72 | 19.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Revenue Performance and Brand Mix: During the first quarter of fiscal year 2026 (13 weeks ended November 29, 2025), the Company reported net sales of USD 340.2 million, reflecting a modest 0.3% year-over-year decline compared to USD 341.3 million in Q1 FY25. Growth in Quest was offset by declines in Atkins and OWYN, resulting in relatively stable consolidated top-line performance.
Brand-Level Dynamics: Quest delivered 9.6% net sales growth, supported by strong retail takeaway and distribution expansion. In contrast, Atkins experienced a 16.5% decline, primarily driven by distribution losses and expected category pressures. OWYN declined 3.3%, largely due to lingering effects of a prior product quality issue and elevated retailer inventory levels entering the quarter.
Retail Consumption Trends: Total company retail takeaway increased approximately 1.8%, led by 12.0% growth in Quest and 17.8% growth in OWYN, while Atkins declined 19.3%, consistent with management expectations. This indicates sustained consumer demand momentum in growth brands despite brand-specific headwinds.
Gross Profit and Margin Performance: Gross profit declined to USD 109.9 million from USD 130.5 million, reflecting a 15.8% year-over-year decrease. Gross margin contracted to 32.3%, down 590 basis points, primarily due to elevated input inflation and tariff-related expenses, only partially offset by productivity initiatives.
Operating Expense Discipline: Operating expenses decreased 4.7% year-over-year to USD 72.3 million. Selling and marketing expenses declined 10.1%, largely driven by reduced Atkins spending, while general and administrative expenses remained broadly stable, supported by cost controls and synergy realization from OWYN integration.
Profitability and Earnings: Net income declined to USD 25.3 million from USD 38.1 million, a 33.7% decrease, while Adjusted EBITDA fell 20.6% to USD 55.6 million. Diluted EPS decreased to USD 0.26 from USD 0.38, and Adjusted Diluted EPS declined to USD 0.39 from USD 0.49, reflecting margin compression and integration-related costs.
Balance Sheet and Liquidity: The Company ended the quarter with USD 194.1 million in cash and USD 400.0 million in term loan debt, resulting in a Net Debt to Adjusted EBITDA ratio of 0.8x. Cash flow from operations improved significantly to USD 50.1 million (vs. USD 32.0 million), driven primarily by working capital benefits. The Company repurchased 5.0 million shares for USD 100 million during the quarter.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given to The Simply Good Foods Company (NASDAQ: SMPL) at the closing market price of USD 16.87, as on Feb 25, 2026
Data Powered by EOD Historical Data (“EODHD”).
Sector: Consumer Defensive Industry: Packaged Foods
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| SMPL Simply Good Foods Co |
0.49 4.04% | 12.63 | 24.02 | 17.27 | 2.57 | 1.93 | 2.67 | 15.09 |
| NSRGF Nestle SA |
- -% | 98.98 | 26.86 | 18.76 | 3.13 | 7.10 | 3.81 | 21.70 |
| NSRGY Nestle SA ADR |
-0.1 0.10% | 98.14 | 26.82 | 18.66 | 3.18 | 7.07 | 3.81 | 21.70 |
| GPDNF Danone S.A |
- -% | 74.80 | 25.33 | 17.39 | 1.97 | 2.55 | 1.88 | 11.70 |
| DANOY Danone PK |
- -% | 15.07 | 24.23 | 17.64 | 1.88 | 2.57 | 1.88 | 11.70 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels as on February 26, 2026. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned has been achieved and is subject to the factors discussed above.
Note 4: StockNextt reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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