Simply Good Foods has gotten torched over the last six months - since August 2025, its stock price has dropped 42.2% to $16.92 per share. This might have investors contemplating their next move.

Is now the time to buy Simply Good Foods, or should you be careful about including it in your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.

Why Is Simply Good Foods Not Exciting?

Even though the stock has become cheaper, we don't have much confidence in Simply Good Foods. Here are three reasons there are better opportunities than SMPL and a stock we'd rather own.

1. Long-Term Revenue Growth Disappoints

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last three years, Simply Good Foods grew its sales at a mediocre 6.9% compounded annual growth rate. This fell short of our benchmark for the consumer staples sector.

2. Projected Revenue Growth Shows Limited Upside

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Simply Good Foods’s revenue to stall, a deceleration versus This projection doesn't excite us and suggests its products will face some demand challenges.

3. Shrinking Operating Margin

Operating margin is a key profitability metric because it accounts for all expenses enabling a business to operate smoothly, including marketing and advertising, IT systems, wages, and other administrative costs.

Analyzing the trend in its profitability, Simply Good Foods’s operating margin decreased by 5.7 percentage points over the last year. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Its operating margin for the trailing 12 months was 9.6%.

Final Judgment

Simply Good Foods’s business quality ultimately falls short of our standards. After the recent drawdown, the stock trades at 8.2× forward P/E (or $16.92 per share). While this valuation is optically cheap, the potential downside is big given its shaky fundamentals. We're fairly confident there are better stocks to buy right now. Let us point you toward a safe-and-steady industrials business benefiting from an upgrade cycle.

Stocks We Like More Than Simply Good Foods

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.