Michael Burry Ramped His SFM Stock Position To 3% — Here's Why He Sees 'Long Runway' Despite Near-Term Pain

• Burry said the stock had been overvalued before its decline, and now sees it as more reasonably priced. 
• SFM climbed to about $182 in mid-2025 before falling to $65–$85 as growth and margin concerns emerged. 
• Sprouts Farmers has cautioned that fiscal 2026 may begin weakly due to tough year-over-year comparisons and continued investment in loyalty programs. 

Sprouts Farmers Market Inc. (SFM) stock is back in focus after “Big Short” investor Michael Burry expressed renewed confidence in the specialty grocer despite a steep pullback from its 2025 peak.

In his Substack post during the weekend, Burry, known for predicting the 2008 financial crisis, disclosed a larger stake in the Phoenix, Arizona-based organic grocer.

SFM’s Valuation Reset Draws Attention

Burry increased his stake in Sprouts to roughly 3%. “I finally ramped up my position in Sprouts Farmers’ Markets SFM at ~$73. This is now a low normal position size – about 3%,” Burry said. 

The move comes as the stock stabilizes near $73 after months of volatility and shifting sentiment in the retail grocery sector.

Burry noted that Sprouts had previously moved “too far ahead of itself” before a broad correction pulled shares back from extremes. After peaking near $182 in June 2025, the stock lost significant momentum as investors reassessed growth expectations and margin pressures heading into 2026. “The stock got too far ahead of itself, and I am glad it came back,” Burry added. 

By early 2026, the stock had fallen into the $65-$85 range. Burry’s buying activity around $73 suggests he sees the valuation, roughly 14 times earnings, as more aligned with the company’s underlying performance.

SFM’s Long-Term Thesis Remains Intact

Despite acknowledging near-term challenges, Burry emphasized his continued confidence in the company’s business model. “I appreciate the model and believe there is a long runway ahead. This year will not be a good one, but long-term, I believe in the business,” said Burry. 

The company has warned that fiscal 2026 may begin on a weaker note due to difficult comparisons and ongoing investment in loyalty initiatives. “While we were pleased with our 2025 results and remain confident in our long-term growth, we expect challenges in 2026, especially in the first half due to strong prior year comparisons and a dynamic macro environment,” said CFO Curtis Valentine during fourth-quarter earnings.  

The company is scheduled to report its fiscal first-quarter earnings on April 29. It sees comparable store sales declining between 3% and 1%, while earnings per share are projected to range from $1.66 to $1.70, against analysts’ consensus estimate of $1.68, according to Fiscal AI data. 

Earlier this month, Melius Research downgraded SFM to 'Sell' from 'Hold' and lowered its price target to $70 from $75, citing risks to the company's traffic and margins that it believes may not meet expectations. Amid constrained traffic, Sprouts' growth algorithm is becoming more investment-driven, more margin-constrained, and "less durable" than what is priced into the shares, the analyst said. The company also faces rising cost pressure across the fresh and produce categories, according to Melius.

SFM stock has declined by over 8% year-to-date. 

Also See: ACHR Stock Gains Institutional Muscle: BlackRock Reveals 6.9% Stake Even As Cash Burn Concerns Weigh

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