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Vital Farms (VITL)
NASDAQ:VITL
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Vital Farms
(NASDAQ:VITL)
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Select Model
Rating:66Neutral
Price Target:
$24.00
▲(8.55% Upside)
Action:DowngradedDate:02/27/26
The score is driven primarily by strong fundamental performance (growth, profitability, and a conservatively levered balance sheet), supported by constructive forward guidance and strategic progress from the latest earnings call. These positives are meaningfully offset by weak 2025 cash-flow/FCF trends and a clearly bearish technical backdrop with the stock in a pronounced downtrend.
Positive Factors
Sustained Revenue Growth
Vital Farms has scaled revenue materially (from ~$214M in 2020 to ~$759M in 2025), demonstrating durable top‑line momentum and distribution expansion. Persistent volume growth supports longer‑term household penetration and provides a foundation for operating leverage as capacity comes online.
Expanded Operational Capacity & Controls
Adding a third Egg Central Station line and a successful ERP rollout reduce historical supply constraints and execution risk. These structural capacity and systems upgrades enable consistent fulfillment, faster scale, and more predictable margins as the company shifts from capacity building to market expansion.
Brand & Supply Network Strength
Higher brand awareness and a materially larger certified farm network deepen the company’s moat in premium pasture‑raised products. Strong brand equity plus a broadened supply base support durable market share gains and resilience versus commodity competitors over the medium term.
Negative Factors
Weak Cash Generation in 2025
A sharp fall in operating cash flow and a negative free cash flow year create a material funding and execution risk until cash generation normalizes. Persistent working‑capital drag or elevated investment needs could constrain reinvestment, buybacks, or require external financing if prolonged.
Stepped‑Up Capital Spending
A large CapEx step‑up to build Vital Crossroads and other capacity materially increases near‑term cash burn and execution complexity. Even with cash on hand and untapped debt capacity, elevated investment needs raise funding reliance and operational risk if demand or cash conversion underperform assumptions.
Margin Pressure from Promotions & Competitive Pricing
Management intends to reinvest pricing moves into promotions and face intensified industry supply recovery, which compresses near‑term margins. If promotional intensity or private‑label pressure persists, sustaining premium unit economics and target margins will be harder, pressuring long‑term profitability.
Vital Farms (VITL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.15B
Dividend YieldN/A
Average Volume (3M)1.52M
Price to Earnings (P/E)18.8
Beta (1Y)0.63
Revenue Growth23.56%
EPS Growth15.06%
CountryUS
Employees598
SectorConsumer Defensive
Sector Strength42
IndustryAgricultural Farm Products
Share Statistics
EPS (TTM)0.35
Shares Outstanding44,774,520
10 Day Avg. Volume1,440,411
30 Day Avg. Volume1,518,038
Financial Highlights & Ratios
PEG Ratio1.14
Price to Book (P/B)4.13
Price to Sales (P/S)1.91
P/FCF Ratio-30.05
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue1.47
Enterprise Value/Gross Profit3.90
Enterprise Value/Ebitda12.61
Forecast
1Y Price Target
$36.00Price Target Upside62.82% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
EPS Forecast (FY)1.53
Revenue Forecast (FY)$930.38M
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 products. The company operates a direct-to-retail model, supplying its products to major grocery chains and retailers across the United States. Key revenue streams include the sale of shell eggs, liquid eggs, and butter, which are marketed as premium products due to their ethical sourcing and superior quality. Vital Farms has established significant partnerships with various retailers, enhancing its distribution network and brand visibility. Additionally, the company benefits from the growing consumer demand for sustainable and ethically produced food, which further drives its sales and market presence.
Vital Farms Key Performance Indicators (KPIs)
Any
Net Revenue by Product
Breaks down revenue by eggs, butter, and other product lines to show which items drive sales and profits. Heavy reliance on eggs points to concentration and exposure to commodity and supply risks, while growth in premium or non-egg lines suggests successful diversification and potential for higher margins. Shifts in product mix also reveal pricing power, promotional pressure, and where Vital Farms is gaining or losing traction with retailers and consumers.
Breaks down revenue by eggs, butter, and other product lines to show which items drive sales and profits. Heavy reliance on eggs points to concentration and exposure to commodity and supply risks, while growth in premium or non-egg lines suggests successful diversification and potential for higher margins. Shifts in product mix also reveal pricing power, promotional pressure, and where Vital Farms is gaining or losing traction with retailers and consumers.
Data provided by:
The Fly
The FlyVital Farms Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call emphasized strong, record‑setting 2025 results—notably double‑digit revenue growth (+25.3%) and record Adjusted EBITDA (+31.6% to $114M)—alongside major operational milestones (third ECS line, ERP implementation without unplanned interruptions, inventory rebuild) and expansion of farm and brand reach. Management acknowledged near‑term headwinds: margin pressure from planned promotional reinvestment, shipment disruption residuals from ERP cutover, volatile retailer ordering due to weather and an industry supply rebound, and a stepped‑up CapEx profile in 2026. Guidance for 2026 is growth‑oriented ($900M–$920M) but more measured, implying a temporary margin contraction to ~12% as the company prioritizes high‑quality placements and household penetration. Overall, achievements and structural progress on capacity, brand, controls, and long‑term targets outweigh the near‑term operational and margin pressures, but management is being cautious about pacing in H1 2026.Q4-2025 Updates
Positive Updates
Record 2025 Revenue and Profitability
Net revenue grew to $759.4M in fiscal 2025, up 25.3% year‑over‑year. Adjusted EBITDA surpassed $100M for the first time, reaching $114.0M, up 31.6% year‑over‑year. Q4 revenue was $213.6M and Q4 Adjusted EBITDA was $29.2M. Net income for the year was $66.3M, or $1.44 per diluted share.
Strong Gross Profit and Operating Leverage
Gross profit rose to $285.7M, representing a 37.6% gross margin (modest contraction from 37.9% prior year). SG&A was $159.4M (21.0% of net revenue) with SG&A as a percent of sales improving by over 110 basis points year‑over‑year, while marketing investment increased by $10.4M.
Operational Capacity & Systems Upgrades Completed
Brought a third production line at ECS online in October, implemented a new ERP with zero unplanned shipment interruptions, transitioned to a dedicated cold storage facility, and rebuilt inventory. 2025 CapEx was $82M, aligned with prior guidance.
Expanded Farm Network
Farm network expanded to more than 600 small farms committed to pasture‑raised standards, adding approximately 175 farms in 2025—a material expansion of supply capabilities tied to the brand's animal welfare standards.
Brand Awareness and Market Share Gains
Brand awareness increased to 34%, up 8 percentage points in 2025. According to Circana, Vital Farms gained 25 basis points of volume share within MULO+ in 2025 and 35 basis points year‑to‑date through Feb 15, positioning the company as a top share gainer in premium shell egg brands.
Improved Financial Controls and Balance Sheet Strength
Successfully remediated a previously disclosed material weakness in internal controls (no restatement required). Company is debt‑free and ended 2025 with $113.4M in cash and marketable securities, retaining balance sheet flexibility.
2026 Guidance and Long‑Term Targets Reinforced
Introduced 2026 guidance of $900M–$920M net revenue (more than 20% growth at midpoint) and Adjusted EBITDA guidance of $105M–$115M (midpoint ≈12% margin). Reaffirmed long‑term targets: $2B net revenue by 2030, gross margin ≥35%, and Adjusted EBITDA margin 15%–17%. Board authorized a $100M 2‑year share repurchase program.
Negative Updates
Margin Compression Due to Promotions and Cost Pressures
Gross margin modestly contracted to 37.6% from 37.9% in the prior year. 2026 guidance implies Adjusted EBITDA margin of ~12.0% at the midpoint versus ~15.0% in 2025 (roughly 300–400 basis points of contraction) driven by reinvestment of the May 2025 price increase into promotions and higher labor/overhead as operations scaled.
ERP Implementation Caused Short‑Term Shipment Disruptions and Shelf‑Space Recapture
Company experienced several weeks of slow shipments in the lead‑up to the peak holiday period tied to the ERP implementation, requiring time in 2026 to recapture shelf space and rebuild retail placement despite zero unplanned shipment interruptions during implementation.
Near‑Term Volatility from Weather and Industry Supply Recovery
Severe winter storms and an aggressive industry supply recovery produced volatile scanner results and unsettled retailer ordering patterns in January/February, leading the company to expect a more measured start to 2026 and some noise in order cadence in H1.
Early‑Year Volume Lag Relative to Initial Expectations
Management cited that year‑to‑date volume growth is lagging initial expectations, prompting a tempered 2026 outlook despite continued volume‑share gains; the company expects volume to be the primary driver of 2026 growth but admitted near‑term pacing is slower than originally anticipated.
Increased Capital Requirements and Cash Drawdown
Cash and marketable securities declined by $46.9M to $113.4M year‑over‑year due to investments to expand production capacity. 2026 CapEx guidance steps up materially to $140M–$150M, increasing near‑term cash burn and reliance on disciplined capital allocation (though management notes untapped debt capacity).
Competitive Pricing & Promotional Pressure
Industry participants recovering supply have created promotional intensity and private‑label pressure that could compress pricing and require Vital Farms to carefully balance promotional investments to protect premium positioning and long‑term unit economics.
Company Guidance
Vital Farms guided fiscal 2026 net revenue of $900–$920 million (more than 20% growth at the midpoint, largely volume‑driven), Adjusted EBITDA of $105–$115 million (12.0% margin at the midpoint), and CapEx of $140–$150 million; management said it will fund projects primarily with existing cash ($113.4 million in cash and marketable securities at year‑end), operating cash flow, has no debt, and the board authorized a $100 million two‑year share repurchase program. The company reiterated its 2030 targets of $2.0 billion in net revenue with a 15%–17% EBITDA margin and a gross margin of 35% or better, noted that each CapEx dollar dedicated to neutrality generates >$5 of annual revenue capacity, and signaled a measured Q1 with expected order‑pattern noise followed by stronger back‑half growth and a pivot to meaningful free cash flow in 2027 and beyond.Vital Farms Financial Statement Overview
Summary
Strong multi-year revenue growth and improved profitability (healthy gross margin and ~8.7% net margin in 2025) alongside low leverage and solid ROE support a high score. The key offset is cash-flow quality: operating cash flow fell in 2025 and free cash flow turned negative, raising execution and funding-risk concerns until it normalizes.Income Statement
Revenue has scaled materially over the last several years (from ~$214M in 2020 to ~$759M in 2025), with growth remaining positive in 2025. Profitability has improved meaningfully versus the low-profit years (2021–2022): net margin is ~8.7% in 2025 versus near-breakeven in 2022, and gross margin has stayed strong (~37–38% in 2024–2025). A key watch item is margin pressure at the operating level versus 2024 (EBITDA margin down in 2025), suggesting higher costs or reinvestment even as earnings remain solid.84
Very Positive
Balance Sheet
The balance sheet appears conservatively levered: debt-to-equity remains low (~0.15 in 2025) and equity has grown substantially alongside the business. Returns on equity are strong (high-teens in 2024–2025), indicating good profitability relative to the capital base. The main weakness is a noticeable step-up in absolute debt in 2025 versus prior years, which increases financing risk if cash generation stays volatile.86
Very Positive
Cash Flow
Cash generation weakened in 2025: operating cash flow fell sharply (to ~$34M from ~$64M in 2024) and free cash flow turned negative (~-$48M) after being strongly positive in 2023–2024. This creates a disconnect versus still-healthy net income, implying working-capital drag and/or elevated investment needs. Positives include a history of positive free cash flow in 2023–2024 and generally improving cash performance compared with 2022, but the 2025 reversal is a clear risk flag until it proves temporary.58
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 759.44M | 606.31M | 471.86M | 362.05M | 260.90M |
| Gross Profit | 285.68M | 229.93M | 162.33M | 109.44M | 82.90M |
| EBITDA | 88.37M | 81.64M | 40.91M | 8.39M | 3.95M |
| Net Income | 66.28M | 53.39M | 25.57M | 1.25M | 2.43M |
Balance Sheet | |||||
| Total Assets | 518.74M | 359.33M | 275.18M | 214.67M | 189.94M |
| Cash, Cash Equivalents and Short-Term Investments | 113.35M | 160.29M | 116.82M | 78.73M | 99.59M |
| Total Debt | 53.49M | 18.71M | 22.56M | 10.69M | 327.00K |
| Total Liabilities | 167.48M | 90.03M | 82.50M | 56.33M | 38.18M |
| Stockholders Equity | 351.26M | 269.30M | 192.68M | 158.33M | 151.47M |
Cash Flow | |||||
| Free Cash Flow | -48.23M | 35.76M | 39.37M | -18.66M | 971.00K |
| Operating Cash Flow | 33.72M | 64.41M | 50.91M | -8.10M | 17.68M |
| Investing Cash Flow | -134.25M | -7.03M | 22.38M | -10.04M | -18.44M |
| Financing Cash Flow | 0.00 | 9.07M | -2.05M | 83.00K | 2.18M |
Vital Farms Technical Analysis
Negative
22.11
Price Trends
29.03
Negative
32.30
Negative
36.22
Negative
Market Momentum
-1.16
Positive
26.74
Positive
16.02
Positive
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 22.11 is below the 20-day moving average (MA) of 26.67, below the 50-day MA of 29.03, and below the 200-day MA of 36.22, indicating a bearish trend. The MACD of -1.16 indicates Positive momentum. The RSI at 26.74 is Positive, neither overbought nor oversold. The STOCH value of 16.02 is Positive, 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
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $4.04B | 3.59 | 48.69% | 10.53% | 65.80% | 197.95% | |
70 Outperform | $2.01B | 22.56 | 4.53% | 3.34% | 1.11% | 414.23% | |
66 Neutral | $1.15B | 18.79 | 20.71% | ― | 23.56% | 15.06% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
59 Neutral | $1.52B | 30.17 | 7.32% | 2.23% | 7.09% | -83.75% | |
52 Neutral | $1.29B | 39.14 | 1.69% | 4.40% | -7.37% | -84.53% | |
49 Neutral | $417.47M | -587.32 | -1.12% | 3.39% | -3.22% | -108.24% |
* Consumer Defensive Sector Average
VITL
Vital Farms
22.11
-11.00
-33.22%
AGRO
Adecoagro SA
8.83
-1.42
-13.85%
CALM
Cal-Maine Foods
83.85
0.68
0.82%
FDP
Fresh Del Monte Produce
42.09
12.65
42.96%
LND
BrasilAgro Cia Brasileira de Propriedades Agricolas
4.27
0.82
23.77%
DOLE
Dole
15.71
1.42
9.95%
Vital Farms Corporate Events
Business Operations and StrategyStock BuybackFinancial DisclosuresRegulatory Filings and Compliance
Vital Farms Posts Strong 2025 Results, Launches Buyback Plan
Positive
Feb 26, 2026
Vital Farms reported strong fourth-quarter and full-year 2025 results on February 26, 2026, with fiscal 2025 net revenue rising 25.3% to $759.4 million and adjusted EBITDA increasing to $114 million, as it scaled its supply chain and expanded its farmer network to ease prior capacity constraints. Net income grew to $66.3 million for 2025, gross margins remained healthy despite higher labor and overhead costs, and the company successfully remediated a previously disclosed material weakness in internal controls without restating results.
The board authorized a two-year stock repurchase program of up to $100 million, signaling confidence in Vital Farms’ long-term growth trajectory and share valuation while relying on cash, operating cash flow, and debt capacity to fund buybacks alongside strategic investments. For fiscal 2026, Vital Farms guided to net revenue of $900 million to $920 million, adjusted EBITDA of $105 million to $115 million, and capital expenditures of $140 million to $150 million—primarily for its Vital Crossroads facility in Indiana—positioning the company to pursue its 2030 $2 billion revenue goal despite a more volatile macro environment and near-term order fluctuations.
The most recent analyst rating on (VITL) stock is a Buy with a $30.00 price target. To see the full list of analyst forecasts on Vital Farms stock, see the VITL Stock Forecast page.
Business Operations and StrategyFinancial Disclosures
Vital Farms Sets Ambitious 2030 Financial Targets
Positive
Dec 16, 2025
On December 16, 2025, Vital Farms announced its ambitious financial targets, aiming for $2 billion in net revenue by 2030, with adjusted EBITDA margins of 15% to 17% and gross margins exceeding 35% between 2025 and 2030. The company plans to achieve these goals by increasing brand awareness, expanding distribution, and scaling its supply chain. Vital Farms also provided updates on its fiscal 2025 and 2026 outlooks, expecting net revenue of $755 to $765 million in 2025 and $930 to $950 million in 2026, reflecting significant growth. The recent completion of its ERP transition and the introduction of a new processing facility, Vital Crossroads, in Indiana, are expected to support these long-term objectives.
The most recent analyst rating on (VITL) stock is a Buy with a $45.00 price target. To see the full list of analyst forecasts on Vital Farms stock, see the VITL Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.