Vital Farms, Inc. (VITL) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA above its 5-year median

Vital Farms's EV/EBITDA of 39.2 is above its 5-year median of 20.8.

P/B below the industry

Vital Farms's price-to-book of 1.43 is below the Food and Kindred Products median of 1.73.

Trading above fair value

The share price of $9.47 is above our fair value estimate of $8.45.

Margin of safety under 20%

The price is 12.1% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 28.0% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 263% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -99.7% over the last twelve months, against a 5-year average of 49.8% a year.

Growing faster than the industry

Revenue grew 16.4% over the last twelve months; the Food and Kindred Products median is 1.4%.

Guidance lowered

Vital Farms lowered its fiscal year 2026 Net revenue outlook on May 7, 2026.

Gross margin slipping

Gross margin was 28.1% over the last twelve months, against 37.6% a year earlier.

Return on equity under 15%

Return on equity was 0.1% over the last twelve months and averaged 12.3% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 0.1%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Vital Farms's return on equity of 0.1% is above the Food and Kindred Products median of -15.0%.

Earnings grew over 5 years

Net income grew 49.8% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 0.0% over the last twelve months, against a 5-year average of 4.8%.

Net margin above the industry

Vital Farms's net margin of 0.0% is above the Food and Kindred Products median of -4.1%.

No debt

Vital Farms has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest not well covered

Operating income covers interest expense 0.3 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.10 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.01; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Vital Farms has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.