(FORTUNE Magazine) - Has Whole Foods become a bargain? Over the past decade Whole Foods Market (Research) (WFMI, $63) has led American consumers into a natural-food buying frenzy and has seen revenues soar 397%, to $4.7 billion in 2005. The Austin retailer's stock has climbed 520% over the past five years, more than 40 times the S&P 500's paltry 12% gain. But Whole Foods missed analyst estimates in the past two quarters, which has driven the stock down 17% since January. Even so, the shares still trade at a hefty multiple (45 times estimated 2006 earnings). The company also faces increased competition as other retailers launch their own organic offensives. Wal-Mart (Research) plans to double its organic and natural-food offerings in its superstores, while Safeway (Research) recently unveiled a new organic product line. Minnesota grocery chain SuperValu (Research) opened its first natural-food store in Indianapolis, and Wild Oats Markets (Research) continues to expand.

Still, one analyst who has taken a hard look at the stock thinks it's a buy. After visiting 15 stores recently, Banc of America's Scott Mushkin reiterated his $82.50 12-month stock target. "Whole Foods ... has a significant opportunity to expand its square footage by adding new stores in underpenetrated markets, moving into new markets, and relocating smaller, older stores in its established markets," he wrote in a recent note. He thinks CEO John Mackey will meet his stated goal of generating $12 billion in annual revenue by 2010. "The store combines its natural and organic roots with a European market feel," says Mushkin. "It's a unique concept, like Starbucks."