Vital Farms’ FY21 Sales Guidance Tops Estimates After 4Q Loss; Shares Dip

Vital Farms forecasted better-than-expected sales for the fiscal year 2021 after the provider of pasture-raised food posted a wider-than-expected fiscal 4Q loss. Shares dropped 2.8% to close at $24.18 on March 24.

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Vital Farms (VITL) reported a 4Q loss of $0.02 per share, compared to the loss of $0.01 per share estimated by analysts. A loss of $0.17 per share was recorded in the prior-year quarter.

Net revenues surged 30% year-over-year to $54 million and outpaced analysts’ expectations of $51.97 million. The outstanding performance was driven mainly by volume increases to distributors and retail partners.

The company’s adjusted EBITDA loss came in at $0.1 million in the quarter, compared to a loss of $4.7 million in the prior-year period. (See Vital Farms stock analysis on TipRanks)

Vital Farms CEO Russell Diez-Canseco commented, “We have demonstrated consistent growth in the years prior to and throughout 2020 and are investing significantly in our future – from growing our network of family farms, doubling capacity at Egg Central Station where we wash and pack eggs, launching a new marketing campaign, entering a national foodservice partnership with Acosta, and attracting top talent to join our team. We believe Vital Farms is well-positioned for success in 2021 and beyond.”

For fiscal 2021, net revenue is expected to be between $246 million and $253 million, versus the consensus estimate of $245.3 million. Adjusted EBITDA is forecasted to be in the range of $6 million to $8 million.

Following the 4Q results, Jefferies analyst Robert Dickerson reiterated a Buy rating and a price target of $40 (65.4% upside potential) on the stock. Dickerson forecasts earnings per share for the first quarter of 2021 to be $0.05.

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 1 Buy and 1 Hold. The average analyst price target of $34.50 implies 42.7% upside potential to current levels.