Vital Farms (VITL) AI Stock Analysis

• Market Cap: $1.41B
• Dividend Yield: N/A
• Average Volume (3M): 781.92K
• Price to Earnings (P/E): 28.1
• Beta (1Y): 0.43
• Revenue Growth: 23.96%
• EPS Growth: 30.96%
• Country: US
• Employees: 598
• Sector: Consumer Defensive
• Sector Strength: 64
• Industry: Agricultural Farm Products
• EPS (TTM): 0.37
• Shares Outstanding: 44,552,307
• 10 Day Avg. Volume: 798,721
• 30 Day Avg. Volume: 781,916
• PEG Ratio: -10.41
• Price to Book (P/B): 3.97
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -33.73
• Enterprise Value/Market Cap: 0.44
• Enterprise Value/Revenue: 0.27
• Enterprise Value/Gross Profit: 2.68
• Enterprise Value/Ebitda: 2.07
• 1Y Price Target: $45.13
• Price Target Upside: 42.59% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

• Rating: 65 Neutral
• Price Target: $33.00 ▲(4.27%Upside)

Vital Farms' strong financial health and consistent revenue growth are significant strengths. However, bearish technical indicators and a high valuation relative to earnings create concerns. Earnings call highlighted growth but also noted challenges like supply constraints and tariff impacts.

Positive Factors

Brand Loyalty

Vital Farms has shown strong brand loyalty among its audience, potentially reducing the impact of price changes on consumer demand.

Expansion and Volume Growth

Vital Farms has added another 25 farms this quarter, bringing its total farm count to over 450, which is expected to significantly boost volumes as they come online.

Financial Performance

Vital Farms achieved a significant EBITDA beat of approximately 30%, indicating strong financial performance.

Negative Factors

Market Concerns

The company's shares fell by 9% despite strong first-quarter results, indicating market concerns.

Price Increase Implications

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.

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 Business Overview & Revenue Model

Company Description

Vital Farms, Inc. (VITL) is a food company that specializes in ethically produced pasture-raised eggs and butter. Founded in 2007 and headquartered in Austin, Texas, the company operates within the consumer packaged goods sector, focusing on sustainable farming practices and animal welfare. Vital Farms collaborates with a network of family farms to provide high-quality, ethically produced products that are sold across the United States.

How the Company Makes Money

Vital Farms generates revenue primarily through the sale of pasture-raised eggs and butter. The company partners with family-owned farms to produce these products, which are then distributed to a wide range of retail channels, including grocery chains, natural food stores, and direct-to-consumer platforms. Vital Farms capitalizes on the growing consumer demand for ethically sourced and sustainably produced food products. The company also benefits from strategic partnerships with retailers and distributors, which help expand its market reach and brand visibility. Additionally, Vital Farms' focus on transparency and quality assurance supports its premium pricing strategy, contributing to its profitability.

Vital Farms Financial Statement Overview

Summary

Vital Farms demonstrates strong financial health with consistent revenue growth, low leverage, and effective use of equity. A dip in free cash flow presents a challenge, but overall operational performance remains robust.

Income Statement

Vital Farms shows robust revenue growth with a TTM revenue of $620.57 million, up from $606.31 million, reflecting a healthy growth trajectory. The Gross Profit Margin remains strong at 37.65%, and the Net Profit Margin is also commendable at 8.26%, although slightly down from the previous year. EBIT and EBITDA margins are stable, showcasing operational efficiency.

Balance Sheet

The company's Debt-to-Equity Ratio is low at 0.07, indicating low leverage, which is favorable for financial stability. The Return on Equity (ROE) is healthy at 17.75%, showing effective use of equity. The Equity Ratio stands strong at 76.64%, underscoring a solid equity base relative to assets.

Cash Flow

Vital Farms experienced a decrease in Free Cash Flow from $36.18 million to $15.70 million, indicating a challenge in cash generation. However, the Operating Cash Flow to Net Income Ratio is solid at 0.90, suggesting good conversion of income to cash. The Free Cash Flow to Net Income Ratio is moderate at 0.31.

Breakdown
TTM	Dec 2024	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
620.57M	606.31M	362.05M	260.90M	214.28M	140.73M
	Gross Profit
233.54M	229.93M	109.44M	82.90M	74.53M	42.88M
	EBIT
61.15M	63.55M	2.10M	52.00K	12.23M	3.35M
	EBITDA
81.39M	81.64M	8.39M	3.95M	14.69M	6.69M
	Net Income Common Stockholders
51.27M	53.39M	1.25M	2.43M	8.80M	2.38M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
161.33M	160.29M	78.73M	99.59M	97.90M	1.27M
	Total Assets
376.89M	359.33M	214.67M	189.94M	171.37M	61.95M
	Total Debt
19.20M	18.71M	10.69M	327.00K	798.00K	6.30M
	Net Debt
-137.10M	-131.89M	-2.22M	-30.64M	-28.75M	5.03M
	Total Liabilities
87.98M	90.03M	56.33M	38.18M	28.99M	30.10M
	Stockholders Equity
288.90M	269.30M	158.33M	151.47M	142.05M	31.59M
Cash Flow		Free Cash Flow
15.70M	36.18M	-18.66M	-386.00K	1.40M	-10.15M
	Operating Cash Flow
46.15M	64.82M	-8.10M	16.32M	11.70M	-5.35M
	Investing Cash Flow
-12.45M	-7.03M	-10.04M	-17.08M	-77.84M	-5.62M
	Financing Cash Flow
8.79M	8.65M	83.00K	2.18M	94.41M	434.00K

Vital Farms Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 31.65
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 31.65 is below the 20-day moving average (MA) of 32.42, below the 50-day MA of 33.32, and below the 200-day MA of 34.68, indicating a bearish trend. The MACD of -0.49 indicates Negative momentum. The RSI at 47.79 is Neutral, neither overbought nor oversold. The STOCH value of 68.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VITL.

Vital Farms Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CALM	84 Outperform	$5.14B	4.76	48.27%	14.34%	60.00%	259.01%
FDP	69 Neutral	$1.57B	10.72	7.51%	3.66%	-0.64%	―
DOLE	68 Neutral	$1.33B	14.20	8.87%	2.43%	0.91%	-49.71%
VITL	65 Neutral	$1.41B	28.12	20.42%	―	23.96%	30.96%
Sector *	65 Neutral	$8.81B	15.01	4.71%	3.72%	3.60%	-2.89%
BG	64 Neutral	$10.94B	10.32	10.36%	3.44%	-10.90%	-36.54%
AGRO	64 Neutral	$956.93M	15.28	4.51%	3.77%	17.05%	-73.53%

Vital Farms Corporate Events

Vital Farms Expands Leadership Roles for Growth Strategy

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.