Sprouts Farmers Market (SFM) Stock Has Crashed: Is It a Buy Now?

First Pacific Advisors recently released its Q2 2026 investor letter, highlighting Sprouts Farmers Market (SFM) as a potential investment opportunity. SFM, a supermarket chain specializing in fresh, natural, and organic products, has shown strong operating margins and returns on capital. The company's stock performed well in 2025, with a low-teens multiple of forward earnings.

However, the fund has reduced its position in SFM due to slowing growth in the second half of 2025. Despite this, the fund believes SFM is an undervalued AI stock that could benefit from Trump-era tariffs and the onshoring trend.