Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 29 Apr, 25 | VITL | Buy | USD 33.64 | USD 35.2 | USD 37.6 | 3 days | 11.8% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Vital Farms, Inc., a food company, provides pasture-raised products in the United States. It offers shell eggs, butter, hard-boiled eggs, and liquid whole eggs. The company was founded in 2007 and is headquartered in Austin, Texas.
Adjusted EBITDA margin improved from 10.2% in 2023 to 14.3% in 2024, with absolute growth of 79.5%, reaching $86.7 million
Net income more than doubled in fiscal year 2024, rising by 108.8% from $25.6 million to $53.4 million
Supply constraints are expected to limit performance in early 2025, due to HPAI-related disruptions affecting poultry supply
Capital expenditures increased by 148.7%, from $11.5 million in 2023 to $28.6 million in 2024, signaling rising infrastructure costs
Vital Farms faces a material operational risk from biological supply chain disruptions—such as avian flu outbreaks—that could limit product availability and revenue growth in the near term
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 33.64 | 32.9 | 35.2 | 37.6 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Strong Revenue Growth in Fiscal Year 2024
Vital Farms achieved notable revenue growth in fiscal year 2024, reporting net revenue of $606.3 million, a 28.5% increase compared to $471.9 million in fiscal year 2023. On a like-for-like basis, adjusting for one fewer week in the 2024 period, net revenue grew by 31%. This growth was primarily driven by volume gains from both new and existing customers, as well as favorable pricing and product mix enhancements. The company’s performance underscores continued consumer demand for ethically produced food offerings and the effectiveness of its retail expansion strategy.
Improved Profitability and Operational Efficiency
The company expanded its gross margin by 352 basis points to 37.9% in 2024, compared to 34.4% in 2023. Gross profit increased from $162.3 million to $229.9 million, driven by higher sales, operational efficiencies, and favorable input costs, particularly in conventional commodities and diesel. Net income rose significantly to $53.4 million, a 108.8% increase from $25.6 million the prior year. Correspondingly, net income per diluted share grew from $0.59 to $1.18, reflecting substantial bottom-line improvement.
Q4 Performance Resilient Despite Shortened Reporting Period
For the fourth quarter of 2024, Vital Farms generated $166.0 million in net revenue, a 22.2% year-over-year increase on a reported basis and a 30% increase on a like-for-like basis after adjusting for the 13-week period versus 14 weeks in Q4 2023. Gross profit for the quarter was $59.9 million, with a gross margin of 36.1%, representing a 280-basis-point increase. Net income for the quarter rose to $10.6 million from $7.2 million, while adjusted EBITDA increased 37.4% to $19.1 million, highlighting sustained momentum despite the shorter timeframe.
Robust Financial Position and Cash Flow Generation
Vital Farms exited 2024 with a strong balance sheet, reporting $160.3 million in cash, cash equivalents, and marketable securities, and no outstanding debt. Net cash provided by operating activities increased to $64.8 million, compared to $50.9 million in 2023. Capital expenditures totaled $28.6 million, lower than projected, due to the deferral of some investments into 2025. The company’s liquidity and disciplined capital management position it well to support upcoming expansion initiatives.
Strategic Supply Chain and Infrastructure Investments for 2025
Looking ahead, Vital Farms anticipates net revenue of at least $740 million in fiscal year 2025, representing 22% year-over-year growth, and adjusted EBITDA of at least $100 million, reflecting 15% growth. To support its operational scale and meet continued demand, the company plans capital expenditures between $50 million and $60 million in 2025. This includes investments in a new washing and packing line at its Egg Central Station in Missouri, additional egg processing facilities, and its Digital Transformation initiative, expected to launch in the second half of 2025.
Progress Toward Long-Term Growth Targets
The company remains on track to reach its goal of $1 billion in net revenue by 2027. In 2024, it expanded its farm network by approximately 125 new family farms, bringing the total to over 425. While the company expects supply constraints in the first half of 2025 due to industry-wide impacts of highly pathogenic avian influenza (HPAI), it anticipates recovery and acceleration in the second half as new capacity comes online. CEO Russell Diez-Canseco emphasized the importance of stakeholder collaboration in achieving these milestones and sustaining future growth.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on Vital Farms, Inc (NASDAQ: VITL) at the closing market price of USD 33.64, as on April 28, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Consumer Defensive Industry: Farm Products
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| VITL Vital Farms Inc |
-0.24 0.69% | 34.46 | 46.98 | 208.33 | 2.22 | 5.44 | 2.02 | 23.31 |
| ADM Archer-Daniels-Midland Company |
-1.4 2.79% | 48.76 | 14.60 | 10.52 | 0.28 | 1.12 | 0.40 | 8.49 |
| TSN Tyson Foods Inc |
0.11 0.19% | 56.86 | - | 24.94 | 0.34 | 1.00 | 0.51 | 26.68 |
| BG Bunge Limited |
-1.745 2.17% | 78.66 | 10.84 | 10.76 | 0.22 | 1.16 | 0.29 | 5.96 |
| MNHVF Mowi ASA |
0.79 4.49% | 18.40 | 19.37 | 9.03 | 1.64 | 2.33 | 2.08 | 8.19 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is April 28,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
This report has been issued by StockNextt which has an Ontario Business Identification Number 1000958347 and British Columbia registration Number FM1051529 is a trade name under Kalkine Canada Advisory Services Inc. having Business Number 761925130BC0001. Kalkine Canada Advisory Services Inc. and StockNextt are collectively referred to as “StockNextt”, “we”, “us”, and “our”. The website https://stocknextt.com and associated pages are published by StockNextt. The information in this report and on the StockNextt website has been prepared from a wide variety of sources, which StockNextt, to the best of its knowledge and belief, considers accurate. StcokNextt has made every effort to ensure the reliability of information contained in its reports, newsletters, and websites. All information represents our views at the date of publication and may change without notice. The information in this report does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products. Our reports contain general recommendations for investing in securities and other financial products. StockNextt does not offer financial advice based upon your personal financial situation or goals, and we shall not be held liable for any investment or trading losses you may incur by using the opinions expressed in our reports, publications, market updates, news alerts and corporate profiles. StockNextt does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. StockNextt’s general advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested. Please also read our Terms and conditions for further information. Employees and/or associates of StockNextt and its related entities may hold an interest in the securities or other financial products covered in this report or on the StockNextt website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.
Copyright © 2023 Krish Capital Pty Ltd. All rights reserved. No part of this website, or its content, may be reproduced in any form without our prior consent.
