Vital Farms (VITL, Financial) has reaffirmed its financial guidance for the fiscal year 2025, despite facing a complex macroeconomic landscape. The company identifies strong consumer demand for its products but acknowledges potential challenges from global trade tensions and economic uncertainties that could influence consumer spending in the upcoming quarters.
Vital Farms believes its solid market position and high consumer interest are vital for navigating these challenges. Although there are current supply limitations, the company anticipates improvement as more family farms boost production. The firm is confident that its strategic investments in brand development and supply chain expansion will support achieving its long-term goals, including reaching a $1 billion net revenue target by 2027.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 9 analysts, the average target price for Vital Farms Inc (VITL, Financial) is $45.44 with a high estimate of $52.00 and a low estimate of $39.00. The average target implies an upside of 26.52% from the current price of $35.92. More detailed estimate data can be found on the Vital Farms Inc (VITL) Forecast page.
Based on the consensus recommendation from 10 brokerage firms, Vital Farms Inc's (VITL, Financial) average brokerage recommendation is currently 1.7, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Vital Farms Inc (VITL, Financial) in one year is $33.21, suggesting a downside of 7.54% from the current price of $35.92. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Vital Farms Inc (VITL) Summary page.
VITL Key Business Developments
Release Date: February 27, 2025
- Net Revenue: $606.3 million for 2024, a 28.5% increase year-over-year.
- Fourth Quarter Revenue Growth: 22.2% increase in reported terms, 30% increase accounting for the extra week in Q4 2023.
- Gross Profit: $229.9 million or 37.9% of net revenue, up from $162.3 million or 34.4% last year.
- Adjusted EBITDA: $86.7 million or 14.3% of net revenue, a 79.2% increase year-over-year.
- Net Income: $53.4 million or $1.18 per diluted share, compared to $25.6 million or $0.59 per diluted share last year.
- Cash and Cash Equivalents: $160.3 million as of December 29, 2024, an increase of $43.5 million from the end of 2023.
- Number of Family Farms: Increased by over 125, reaching more than 425 by year-end.
- Egg Supply Capacity: Expanded by more than 40% with new farms.
- Butter Sales Growth: 11% increase for 2024, with nearly doubling quarterly sales in Q4.
- Household Penetration: Reached over 14 million homes, a 20% increase year-over-year.
- 2025 Revenue Guidance: At least $740 million, representing at least 22% growth.
- 2025 Adjusted EBITDA Guidance: At least $100 million, representing at least 15% growth.
- Capital Expenditures (CapEx) for 2025: Projected at $50 million to $60 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Vital Farms Inc (VITL, Financial) exceeded $600 million in net revenue for 2024, surpassing initial expectations and setting a path towards a $1 billion sales target by 2027.
- The company added over 125 new family farms, increasing egg sourcing capacity by more than 40%, demonstrating strong recruitment and appeal of their model.
- Vital Farms Inc (VITL) achieved a 79.2% growth in adjusted EBITDA to $86.7 million, with an adjusted EBITDA margin increase of 405 basis points.
- The butter segment showed significant growth, with sales up 11% for the year and nearly doubling quarterly sales in Q4.
- Brand awareness and household penetration increased, with a 20% rise in consumer base and a 12% increase in buy rate year over year.
Negative Points
- The egg industry faces supply issues due to avian influenza, with nearly 40 million egg layers lost in 2024, impacting supply and creating constraints.
- Vital Farms Inc (VITL) expects a modest step down in growth rate in the first half of 2025 due to supply constraints and lower inventory levels.
- SG&A expenses increased to $133.9 million, driven by marketing, stock-based compensation, and higher employee headcount, impacting net revenue percentage.
- The company anticipates a decline in adjusted EBITDA margin for 2025 compared to the high margins experienced in the first half of 2024.
- Weather-related disruptions and supply constraints have already impacted operations at Egg Central Station, affecting efficiency and gross margins.
