Is Freshpet (FRPT) The Most Expensive Stock Insiders Are Buying In March?

In the world of investing, few signals are as telling as insider buying. When those closest to a company put their own money on the line, it's a strong indicator that they believe in the company's future. Freshpet Inc. (FRPT) has seen a flurry of insider activity in March 2025, with directors and officers making significant purchases. But is Freshpet the most expensive stock insiders are buying this month, and more importantly, should you follow their lead?

Freshpet's recent financial performance has been nothing short of impressive. The company reported a 22% increase in net sales for the fourth quarter of 2024, reaching $262.7 million, and a 27.2% increase for the full year, totaling $975.2 million. This growth is driven predominantly by volume gains of 26.1%, demonstrating robust consumer demand and successful market penetration without heavy reliance on price increases. Freshpet's gross margin improved to 40.6% for the year, up from 32.7% in 2023, reflecting successful operational optimization and economies of scale. The company's adjusted EBITDA rose to $161.8 million, a significant increase from $66.6 million in 2023. These margin improvements are crucial for sustaining profitability and indicate effective cost management and operational efficiency.



But what about the insider buying? Director Timothy Mclevish purchased 1,750 shares of the company’s stock on March 18, 2025, valued at $154,815. This transaction indicates a strong vote of confidence in the company’s future prospects. Other insiders, such as Fajemirokun-Beck, Steeneck, and Mclevish, have also made purchases in February 2025, further supporting the positive outlook for the company.

Freshpet's future growth prospects are equally compelling. The company's 2025 guidance projects net sales between $1.18-1.21 billion and adjusted EBITDA of at least $210 million. Freshpet has also updated its 2027 targets, maintaining $1.8 billion in net sales while raising adjusted gross margin to 48% and adjusted EBITDA margin to 22%. These targets reflect management's increased confidence in operational leverage and sustained margin expansion.

However, it's not all sunshine and roses. Freshpet's SG&A expenses increased to $358 million for the year, up from $281.3 million in 2023. This rise suggests that the company is investing heavily in marketing and compensation, which could impact future profitability if not managed carefully. Additionally, cash and cash equivalents decreased to $268.6 million from $296.9 million at the end of 2023, which could be a concern for some investors.

So, is Freshpet the most expensive stock insiders are buying in March? The answer is yes, but it's important to consider the context. Freshpet's strong financial performance, operational efficiency, and future growth prospects make it an attractive investment. The recent insider buying activity is a strong indicator of confidence in the company's future prospects. However, investors should also be aware of the potential risks, such as rising SG&A expenses and decreasing cash and cash equivalents.

In conclusion, Freshpet's recent insider buying activity aligns with the company's strong financial performance and optimistic future growth prospects. The data from the latest earnings reports support the notion that insiders, such as Director Timothy Mclevish, have confidence in the company's ability to continue delivering robust financial results and achieving its long-term growth objectives. However, investors should also consider the potential risks and make an informed decision based on their own investment goals and risk tolerance.