Education
About Us
Working with TipRanks
Follow Us
Vital Farms (VITL)
NASDAQ:VITL
Top Page
Vital Farms
(NASDAQ:VITL)
78Outperform
Positive Factors
Brand Loyalty
Vital Farms has shown strong brand loyalty among its audience, potentially reducing the impact of price changes on consumer demand.
Financial Performance
Vital Farms achieved a significant EBITDA beat of approximately 30%, indicating strong financial performance.
Market Position
Vital Farms has maintained the number one position and ~75% market share within the specialty egg category, increasing sales at an ~30% CAGR vs. 21% for the total specialty egg category since 2020.
Negative Factors
Price Increase Concerns
The negative stock reaction is attributed to concerns that their price increase implies weaker volume, especially given the risk of economic recession and competition from normalizing supplies of conventional eggs.
Stock Market Reaction
The company's shares fell by 9% despite strong first-quarter results, indicating market concerns.
Supply Constraints
Vital Farms is experiencing supply constraints and is operating with little to no inventory due to ongoing demand that peers have been unable to meet.
Vital Farms (VITL) vs. S&P 500 (SPY)
Market Cap
$1.60B
Dividend YieldN/A
Average Volume (3M)826.78K
Price to Earnings (P/E)30.3
Beta (1Y)0.33
Revenue Growth29.14%
EPS Growth140.02%
CountryUS
Employees598
SectorConsumer Defensive
Sector Strength82
IndustryAgricultural Farm Products
Share Statistics
EPS (TTM)0.37
Shares Outstanding44,497,590
10 Day Avg. Volume620,332
30 Day Avg. Volume826,780
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.98
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit9.63
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$45.00Price Target Upside33.06% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
Vital Farms Business Overview & Revenue Model
Company DescriptionVital Farms (VITL) is a prominent player in the food industry, primarily known for its ethical and sustainable approach to farming. The company focuses on producing pasture-raised eggs and butter, emphasizing humane treatment of animals, environmental sustainability, and transparency in its operations. Vital Farms collaborates with a network of small family farms across the United States, ensuring that its products meet high standards of quality and ethical farming practices.
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
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.85
Very Positive
Balance Sheet
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.80
Positive
Cash Flow
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.78
Positive
| Breakdown | ||||
| Mar 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 471.86M | 362.05M | 260.90M | 214.28M | 140.73M | Gross Profit |
| 162.33M | 109.44M | 82.90M | 74.53M | 42.88M | EBIT |
| 33.25M | 2.94M | 406.00K | 12.23M | 4.77M | EBITDA |
| 45.31M | 10.23M | 3.95M | 14.69M | 6.69M | Net Income Common Stockholders |
| 25.57M | 1.25M | 2.43M | 8.80M | 3.31M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 116.82M | 78.73M | 99.59M | 97.90M | 1.27M | Total Assets |
| 275.18M | 214.67M | 189.94M | 171.37M | 61.95M | Total Debt |
| 22.56M | 10.69M | 327.00K | 798.00K | 6.30M | Net Debt |
| -61.59M | -2.22M | -30.64M | -28.75M | 5.03M | Total Liabilities |
| 82.50M | 56.33M | 38.18M | 28.99M | 30.10M | Stockholders Equity |
| 192.68M | 158.33M | 151.47M | 142.05M | 31.59M |
| Cash Flow | Free Cash Flow | |||
| 39.37M | -18.66M | -386.00K | 1.40M | -10.15M | Operating Cash Flow |
| 50.91M | -8.10M | 16.32M | 11.70M | -5.35M | Investing Cash Flow |
| 22.38M | -10.04M | -17.08M | -77.84M | -5.62M | Financing Cash Flow |
| -2.05M | 83.00K | 2.18M | 94.41M | 434.00K |
Vital Farms Technical Analysis
Negative
33.82
Price Trends
32.43
Positive
35.58
Negative
34.75
Negative
Market Momentum
0.53
Positive
50.23
Neutral
48.32
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VITL, the sentiment is Negative. The current price of 33.82 is below the 20-day moving average (MA) of 34.05, above the 50-day MA of 32.43, and below the 200-day MA of 34.75, indicating a neutral trend. The MACD of 0.53 indicates Positive momentum. The RSI at 50.23 is Neutral, neither overbought nor oversold. The STOCH value of 48.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $5.16B | 4.59 | 48.27% | 7.47% | 60.00% | 259.01% | |
78 Outperform | $1.60B | 30.26 | 20.42% | ― | 29.14% | 140.02% | |
76 Outperform | $8.90B | 14.11 | 16.22% | 2.32% | -6.88% | -4.93% | |
70 Outperform | $6.36B | 18.94 | 9.15% | ― | 1.48% | 9.36% | |
69 Neutral | $16.03B | 21.20 | 9.54% | 3.90% | -1.84% | -5.14% | |
69 Neutral | $34.30B | 18.30 | 94.91% | 2.85% | 3.55% | -5.79% | |
64 Neutral | $8.81B | 14.72 | 5.05% | 174.27% | 3.55% | 3.81% |
* Consumer Defensive Sector Average
Performance Comparison
VITL
Vital Farms
33.82
-1.78
-5.00%
CALM
Cal-Maine Foods
91.23
37.73
70.52%
HRL
Hormel Foods
29.21
-5.03
-14.69%
POST
Post Holdings
110.74
3.96
3.71%
SYY
Sysco
70.75
-2.75
-3.74%
INGR
Ingredion
137.16
18.72
15.81%
Vital Farms Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: -5.85%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
Vital Farms showed strong revenue growth and brand awareness, particularly in their butter business and farm network expansion. However, they faced challenges due to egg supply constraints, decreased net income, and the impact of tariffs leading to price increases. The sentiment is balanced with significant achievements and notable challenges.Q1-2025 Updates
Positive Updates
Record First Quarter Volume and Net Sales
Vital Farms reported a net revenue of $162 million for the first quarter, marking a 10% increase from the previous year and the company's twentieth consecutive quarter of year-over-year volume and net revenue growth.
Strong Growth in Butter Business
The butter segment experienced a robust growth with net revenue up 41% year-over-year, driven by increasing demand and improved supply chain capabilities.
Expansion of Farm Network
Vital Farms added approximately 25 new family farms to its network in the first quarter, increasing their network by roughly 50% since the end of 2023, with 8.2 million hens under contract.
Improved Brand Awareness
Brand awareness increased to 31%, a five-point increase since the beginning of the year, partly due to increased media attention on the egg industry.
Negative Updates
Egg Supply Constraints
Volume-related growth was below trend at 5.6% due to egg supply constraints and depleted inventory levels, impacting the company's ability to meet demand.
Decreased Net Income
Net income for the first quarter of 2025 decreased by 11.2% to $16.9 million compared to $19 million in the previous year, driven by increased investments in future growth.
Impact of Recently Announced Tariffs
The recently announced tariffs are expected to impact costs, leading to a modest, low double-digit percentage price increase for shell egg products.
Gross Profit Margin Decline
Gross profit margin decreased from 39.8% to 38.5% year-over-year due to increased investments in crew members and less efficient operations due to limited egg supply.
Company Guidance
During the Vital Farms First Quarter 2025 Earnings Conference Call, management reaffirmed their 2025 financial outlook and discussed a number of metrics and strategic initiatives. The company reported a net revenue of $162 million for the first quarter, marking a 10% increase from the previous year, driven by price mix benefits and volume-related growth. The call highlighted the twenty consecutive quarters of year-over-year volume and net revenue growth since the IPO in 2020. Adjusted EBITDA was reported at $27.5 million, constituting 16.9% of net revenue, although it showed a decrease from the prior year due to increased personnel investments. The butter business saw robust growth with a 41% increase in net revenue year-over-year. The company also noted an increase in aided brand awareness, reaching 31% by the end of the first quarter, and household penetration standing at 11.3% of US households. Vital Farms is on track to achieve its long-term goal of $1 billion in net revenue by 2027, with a gross margin target of 35% and an adjusted EBITDA margin target of 12-14%. Additionally, management announced a modest price increase for shell eggs to offset anticipated cost impacts from recently announced tariffs.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.