Every Monday we feature “A Stock to Sell” as our daily post. With every stock or investment we recommend as a sell, we give you a full explanation of why we advise against investing in it at this time. Today an organic food store operator that has been among the most active stocks in the past year—but has seen its share price tumble.

Sprouts Farmers Market Inc. (symbol SFM on Nasdaq; www.sprouts.com) opened its first organic and natural food store in Arizona in 2002. It now has 200 outlets, mainly in the western U.S.

Sprouts first sold shares to the public at $18.00 each and began trading on Nasdaq in August 2013.

The company has grown quickly in the past few years. In 2011, it merged with Henry’s Holdings, which operated 43 stores. It later purchased 37 outlets operating under the Sunflower Farmers Market banner.

In addition to acquisitions, Sprouts continues to add new stores, opening 10 in the three months ended March 29, 2015. That increased its sales by 18.7% in the quarter, to $857.6 million from $722.6 million a year earlier. Same-store sales (which exclude recently opened and closed outlets) gained 4.8%.

Overall earnings rose 11.1%, to $37.5 million from $33.7 million, while per-share profits increased 9.1%, to $0.24 from $0.22, on more shares outstanding. If you set aside the cost of store closures, earnings improved to $0.25 a share.

Sprouts plans to open 27 outlets in all of 2015, with about 70% of those in markets it already operates in. The remaining 30% will be in new areas, like Alabama and Missouri. It expects to spend $110 million on these openings, as well as upgrades to its current properties.

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Aggressive investing: Lower forecast chops Sprouts’ share price by 29%

The company can easily afford these outlays. As of March 29, 2015, it held cash of $177.7 million, or $1.16 a share. Its long-term debt of $247.1 million is a low 5.5% of its market cap.

Sprouts benefits from rising interest in healthier foods. It also gains from its growing list of private-label products, which come with higher profit margins than brand names. Moreover, the private equity firm that helped take Sprouts public sold its remaining 15.8 million shares in March 2015. That should boost the stock’s liquidity.

However, Sprouts now expects its same-store sales to rise 6% to 7% for all of 2015, down from a 9.9% gain in 2014. That’s mainly due to low inflation and rising competition from rivals like Whole Foods (symbol WFM on Nasdaq) and large food sellers such as Kroger Co. (symbol KR on New York) (see our recent article on Kroger here), which have added more organic foods in recent years.

The lower 2015 forecast cut Sprouts’ share price by 29.2%, from a recent peak of $38.45 in February 2015 to a low of $27.23 in May. Whole Foods also fell 27.0% in the same period.

Sprouts’ long-term outlook is positive. But even after its recent drop, the stock is expensive at 32.4 times the $0.85 a share the company will likely earn in 2015.

TSI Network recommendation: SELL