Vital Farms (VITL) AI Stock Analysis

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Vital Farms

(NASDAQ:VITL)

78Outperform

Vital Farms' overall stock score reflects its strong financial performance and positive market momentum, supported by strategic leadership changes. However, valuation concerns and operational challenges slightly temper the overall outlook. The company's strong revenue growth, profitability, and strategic initiatives provide a robust foundation, while its high P/E ratio could limit potential gains.

Positive Factors

Capacity Expansion

Capacity expansion is underway, expected to increase ECS capacity by 30% and supported by a significant increase in farm suppliers.

Financial Performance

Vital Farms' reported better than expected organic sales growth of 30% and 2025 guidance of 'at least 22%'.

Negative Factors

Financial Filings

Shares performed poorly due to a disclosed material weakness in financial filings, though it is expected to be remediated in FY26 and not impact current or historical numbers.

Price Competition

Vital Farms' brand is now selling at a 26% premium to pasture-raised egg competitors in the L12W at retail, which is above the 3-year average of 20%.

Vital Farms (VITL) vs. S&P 500 (SPY)

Market Cap

$1.43B

Dividend YieldN/A

Average Volume (3M)1.26M

Price to Earnings (P/E)27.5

Beta (1Y)0.26

Revenue Growth29.14%

EPS Growth140.02%

CountryUS

Employees598

SectorConsumer Defensive

Sector Strength90

IndustryAgricultural Farm Products

Share Statistics

EPS (TTM)1.19

Shares Outstanding44,257,534

10 Day Avg. Volume896,999

30 Day Avg. Volume1,261,718

Financial Highlights & Ratios

PEG Ratio0.27

Price to Book (P/B)N/A

Price to Sales (P/S)2.17

Price to Cash Flow (P/CF)22.30

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$45.00

Price Target Upside37.66% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering10

Vital Farms Business Overview & Revenue Model

Company DescriptionVital Farms, Inc., an ethical food company, provides pasture-raised products in the United States. It offers shell eggs, butter, hard-boiled eggs, ghee, liquid whole eggs, and egg bite products. Vital Farms, Inc. was founded in 2007 and is headquartered in Austin, Texas.

How the Company Makes MoneyVital Farms generates revenue primarily through the sale of its pasture-raised eggs and butter. These products are distributed through various channels, including grocery stores, supermarkets, and online platforms. The company capitalizes on the growing consumer demand for ethically produced and environmentally sustainable food products. By maintaining strong relationships with retailers and leveraging its brand reputation, Vital Farms can command premium pricing for its high-quality offerings. Additionally, partnerships with family-owned farms enable Vital Farms to maintain a steady supply of raw materials while supporting local agriculture. The company's commitment to transparency and ethical sourcing further enhances its brand value and contributes to customer loyalty, driving consistent revenue growth.

Vital Farms Financial Statement Overview

Summary

Vital Farms showcases a commendable financial profile with strong revenue and profit growth, a robust balance sheet with low leverage, and significant improvements in cash flow. The company is well-positioned in the consumer foods industry, reflecting effective strategic management and operational performance.

Income Statement

Very Positive

Vital Farms shows strong revenue growth, with TTM revenue increasing significantly from previous years. Gross profit margin remains solid at approximately 37.36% TTM. Net profit margin has improved to 8.68% TTM, reflecting enhanced profitability. EBIT and EBITDA margins are robust at 10.35% and 12.62% TTM, respectively. The company's consistent upward trajectory in revenue and profit margins indicates strong market performance in the consumer foods sector.

Balance Sheet

Positive

The company's balance sheet is healthy, with a low debt-to-equity ratio of 0.08 TTM, indicating minimal reliance on debt financing. Return on equity is at 19.74% TTM, demonstrating efficient use of equity. The equity ratio is strong at 73.5% TTM, highlighting a solid equity base. Vital Farms maintains a positive financial position with manageable liabilities and significant equity, reducing potential financial risk.

Cash Flow

Positive

Vital Farms exhibits a significant improvement in cash flow, turning negative operating cash flow in previous years to a positive $73.77 million TTM. Free cash flow has also turned positive, supporting the company's operational health. The operating cash flow to net income ratio of 1.47 TTM indicates efficient cash conversion. Continued positive cash flow trends suggest strong financial management and operational efficiency.

TTM	Mar 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
576.13M	471.86M	362.05M	260.90M	214.28M	140.73M
	Gross Profit
215.25M	162.33M	109.44M	82.90M	74.53M	42.88M
	EBIT
59.64M	33.25M	2.94M	406.00K	12.23M	4.77M
	EBITDA
72.70M	45.31M	10.23M	3.95M	14.69M	6.69M
	Net Income Common Stockholders
50.02M	25.57M	1.25M	2.43M	8.80M	3.31M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
102.89M	116.82M	78.73M	99.59M	97.90M	1.27M
	Total Assets
173.82M	275.18M	214.67M	189.94M	171.37M	61.95M
	Total Debt
682.00K	22.56M	10.69M	327.00K	798.00K	6.30M
	Net Debt
-34.42M	-61.59M	-2.22M	-30.64M	-28.75M	5.03M
	Total Liabilities
26.60M	82.50M	56.33M	38.18M	28.99M	30.10M
	Stockholders Equity
146.90M	192.68M	158.33M	151.47M	142.05M	31.59M
Cash Flow		Free Cash Flow
60.89M	39.37M	-18.66M	-386.00K	1.40M	-10.15M
	Operating Cash Flow
73.77M	50.91M	-8.10M	16.32M	11.70M	-5.35M
	Investing Cash Flow
12.39M	22.38M	-10.04M	-17.08M	-77.84M	-5.62M
	Financing Cash Flow
6.56M	-2.05M	83.00K	2.18M	94.41M	434.00K

Vital Farms Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price32.69

Price Trends

50DMA

33.66

Negative

100DMA

35.27

Negative

200DMA

35.79

Negative

Market Momentum

MACD

-0.97

Negative

RSI

46.67

Neutral

STOCH

38.72

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VITL, the sentiment is Neutral. The current price of 32.69 is above the 20-day moving average (MA) of 30.99, below the 50-day MA of 33.66, and below the 200-day MA of 35.79, indicating a neutral trend. The MACD of -0.97 indicates Negative momentum. The RSI at 46.67 is Neutral, neither overbought nor oversold. The STOCH value of 38.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for VITL.

Vital Farms Risk Analysis

Vital Farms disclosed 64 risk factors in its most recent earnings report. Vital Farms reported the most risks in the “Production” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Vital Farms Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VITL	78 Outperform	$1.43B	27.46	23.11%	―	29.14%	140.02%
CALM	76 Outperform	$4.58B	7.27	34.26%	4.58%	15.57%	38.87%
AGRO	71 Outperform	$1.04B	11.56	7.11%	3.29%	18.45%	-57.55%
FDP	71 Outperform	$1.46B	10.32	7.32%	3.44%	-0.95%	―
DOLE	71 Outperform	$1.29B	10.34	12.14%	2.35%	2.79%	-13.96%
BG	69 Neutral	$9.62B	8.99	10.95%	3.79%	-10.78%	-45.77%
Sector *	62 Neutral	$19.87B	13.65	-16.14%	3.29%	1.16%	3.90%

* Consumer Defensive Sector Average

Performance Comparison

VITL

Vital Farms

32.30

7.59

30.72%

AGRO

Adecoagro SA

10.46

-1.06

-9.20%

Bunge Global

69.51

-34.30

-33.04%

CALM

Cal-Maine Foods

90.33

31.11

52.53%

FDP

Fresh Del Monte Produce

29.61

4.86

19.64%

DOLE

Dole

13.31

1.84

16.04%

Vital Farms Earnings Call Summary

Earnings Call Date: Feb 27, 2025 | % Change Since: -3.51% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Positive

The earnings call reflects a generally positive outlook for Vital Farms, with significant revenue growth, expansion of the farm network, and improved brand metrics. However, the challenges posed by egg supply constraints and avian influenza are notable concerns that may impact short-term growth. The company's strategic investments in supply chain and marketing are expected to support future growth.

Highlights

Exceeding Revenue Expectations

Vital Farms surpassed their financial guidance for 2024, achieving over $600 million in net revenue, ahead of initial expectations. They are on track to meet a $1 billion sales target by 2027.

Expansion of Farm Network

The company added over 125 new family farms, increasing their farm count to more than 425. This expansion is expected to increase egg sourcing capacity by over 40%.

Improved Brand Metrics

Brand awareness increased to 26%, household penetration grew by 20% to just over 14 million homes, and the buy rate increased by 12% year-over-year.

Strong Financial Performance

Net income for 2024 was $53.4 million, up from $25.6 million last year. Adjusted EBITDA grew by 79.2% to $86.7 million, with a margin increase of 405 basis points.

Butter Segment Growth

The butter business saw sales increase by 11% in 2024, with a nearly doubling of quarterly sales in Q4.

Lowlights

Egg Supply Constraints

The egg industry faced supply issues due to avian influenza, with nearly 40 million egg layers lost in 2024. These shortages have created supply constraints for Vital Farms.

Modest Growth Projections for Q1 2025

Due to continued supply constraints and lower inventory levels, the company anticipates a modest step down in growth rate in the first quarter of 2025.

Increased SG&A Expenses

SG&A expenses for 2024 were $133.9 million or 22.1% of net revenue, up from 21.6% the previous year, driven by marketing expenses, stock-based compensation, and increased headcount.

Impact of Avian Influenza

The outbreak of avian influenza has been a significant challenge, with more than 27 million hens lost in early 2025.

Company Guidance

During the Vital Farms Q4 2024 earnings call, significant guidance metrics were outlined for the upcoming fiscal year. The company surpassed $600 million in net revenue for 2024 and aims to reach $1 billion by 2027. For 2025, the guidance includes at least $740 million in net revenue, representing a 22% growth, and at least $100 million in adjusted EBITDA, marking a 15% increase. The company plans capital expenditures between $50 million and $60 million, primarily for expanding production capacity, including a new egg grading line expected to increase capacity by 30% by the end of 2025. Moreover, Vital Farms continues to build its farm network, having added 125 new family farms in 2024, and anticipates these farms will be fully operational by Q4 2025, further expanding egg sourcing capacity by over 40%. Despite challenges in the egg industry, including avian influenza causing significant bird losses, Vital Farms maintains a strong position with its resilient supply chain and brand loyalty, forecasting an acceleration in financial and commercial performance, particularly in the latter half of 2025.

Vital Farms Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Vital Farms Expands Leadership Roles for Growth Strategy

Positive

Jan 16, 2025

On January 16, 2025, Vital Farms announced expanded roles for two senior leaders, Peter Pappas and Kathryn McKeon, effective from January 1, 2025. Pappas will now serve as Chief Sales Officer and President, Eggs, while McKeon will be Chief Marketing Officer and General Manager, Butter. These appointments are part of Vital Farms’ strategy to reach $1 billion in annual net revenue by 2027, with Pappas overseeing the eggs business and McKeon leading the marketing efforts for the butter business. The company aims to sustain strong growth and maintain its market leadership in ethically produced foods.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.