Freshpet Inc (FRPT)

Return on equity (ROE)

Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020
Net income (ttm) US$ in thousands 15,626 46,925 44,093 25,032 9,774 -32,634 -50,079 -60,419 -63,336 -55,762 -62,872 -47,436 -35,042 -29,698 -23,731 -18,114 -10,486 -3,188 4,743 4,263
Total stockholders’ equity US$ in thousands 1,049,490 1,055,360 1,021,450 995,804 977,844 953,454 938,556 937,784 948,907 1,031,570 1,029,940 1,032,670 708,054 719,754 723,518 719,811 721,396 394,169 394,489 384,591
ROE 1.49% 4.45% 4.32% 2.51% 1.00% -3.42% -5.34% -6.44% -6.67% -5.41% -6.10% -4.59% -4.95% -4.13% -3.28% -2.52% -1.45% -0.81% 1.20% 1.11%

March 31, 2025 calculation

ROE = Net income (ttm) ÷ Total stockholders’ equity
= $15,626K ÷ $1,049,490K
= 1.49%

The analysis of Freshpet Inc's return on equity (ROE) over the specified period reveals significant fluctuations, indicating a trajectory of initial challenges followed by an emerging positive trend. From June 30, 2020, to March 31, 2021, the ROE was notably low, oscillating from marginally positive figures such as 1.11% in June 2020 and 1.20% in September 2020, to negative values reaching -0.81% in December 2020 and further declining to -1.45% in March 2021. This period exemplifies the company's struggles to generate profit relative to shareholders' equity, which could be associated with operational hurdles or strategic adjustments during that timeframe.

Between March 31, 2021, and March 31, 2022, the ROE persisted in negative territory, with declining trends reaching -4.95%, continuing to deteriorate through September 2022 at -6.10%, and maintaining negative levels through December 2022 and March 2023. The consistent negative ROE indicates persistent challenges in profitable operations and potential issues with efficiency or market competitiveness.

However, starting from March 31, 2024, a marked turnaround is apparent. The ROE shifts to positive territory, reaching 1.00%, and continues to improve to 2.51% in June 2024, 4.32% in September 2024, and 4.45% in December 2024. By March 31, 2025, the ROE is recorded at 1.49%, indicating a significant recovery in profitability relative to shareholders' equity.

This evolution signifies a transformation in Freshpet Inc's operational performance and financial efficiency. The recent positive ROE figures suggest that the company may have implemented effective strategic measures, improved operational margins, or benefited from favorable market conditions, leading to enhanced profitability and value creation for shareholders after a period of sustained negative ROE.