11 Oversold Growth Stocks to Buy Now

4. Freshpet, Inc. (NASDAQ:FRPT)

RSI: 38.12

Estimated average analysts’ upside: 59.28%

Last 5 years revenue CAGR: 31.81%

Number of Hedge Fund Holders: 40

​Freshpet, Inc. (NASDAQ:FRPT) is a pet food company that manufactures and markets fresh, refrigerated meals and treats for dogs and cats. Its products are notorious for being made of natural ingredients and no preservatives, thus appealing to pet owners in higher income brackets. FRPT’s products are distributed throughout North America and Europe in grocery, mass, and pet specialty retailer stores.

Freshpet, Inc. (NASDAQ:FRPT) demonstrated strong financial performance in 2024, achieving net sales of $975 million, representing a 27% YoY growth, and reaching positive net income for the first time with $0.94 per share. The company significantly improved its profitability metrics, with adjusted gross margin increasing by 650 basis points to 46.5% and adjusted EBITDA rising 143% to $161.8 million YoY. The growth was primarily driven by volume gains, with the company adding approximately 2 million households, including 800,000 super heavy and heavy users, while maintaining over 99% fill rates despite selling 27% more volume than the previous year. The spectacular results go against the recent price performance, making FRPT one of the best oversold growth stocks to buy right now.

Looking ahead, Freshpet, Inc. (NASDAQ:FRPT) has raised its 2027 margin targets, now expecting 48% adjusted gross margin (up from 45%) and 22% adjusted EBITDA margin (up from 18%). For 2025, the company projects net sales growth between 21% and 24%, and adjusted EBITDA of at least $210 million. The company’s long-term outlook remains robust, with expectations to be free cash flow positive by 2026 and potential for adjusted EBITDA margin to reach the mid-20s beyond fiscal year 2027. Notably, when fully built out, the company’s three existing kitchens are expected to support up to $3 billion in sales, almost three times higher than their current capacity.