Bull of the Day: Vital Farms (VITL)

Vital Farms (VITL), a Zacks Rank #1 (Strong Buy), is a mission-driven food company known for its commitment to transparency and ethical sourcing. The company specializes in pasture-raised products such as shell eggs, butter, hard-boiled eggs, ghee, and liquid whole eggs, all produced in partnership with a network of family farms.

After a recent pullback, the company is trading down slightly for the year. However, both the technicals and fundamentals look strong. With earnings due up in just over a week, investors should consider the name before they report.

About the Company

The company distributes its products under the Vital Farms brand and other trade names, reaching customers through retail stores, foodservice channels, and third-party distributors across the United States.

With a focus on ethical food production, Vital Farms has become a leader in the pasture-raised category, appealing to consumers who value animal welfare, environmental stewardship, and high-quality ingredients.

VITL is valued at $1.6 billion and has a Forward PE of 28. The stock has Zacks Style Scores of “C” in Growth and Momentum, but a “D” in Value.

Q1 Earnings Beat

In early May, Vital Farms reported first-quarter EPS beat of 42%. Earnings came in at $0.37, beating estimates of $0.26, while revenue came in slightly below expectations at $162 million versus $163 million expected.

Adjusted EBITDA for the quarter was $27.5 million, down from $29.1 million a year ago, with margins narrowing to 16.9% from 19.7%. 

The company reaffirmed its full-year 2025 guidance, including adjusted EBITDA of over $100 million, revenue above $740 million, and capital expenditures between $50 million and $60 million.

Despite macroeconomic uncertainty and potential headwinds from global trade tensions, management emphasized continued strong consumer demand and confidence in long-term growth. The company remains on track to reach its $1 billion net revenue goal by 2027, supported by strategic investments in brand-building and supply chain expansion.

Estimates Mixed

Looking at earnings estimates, we see a mixed story, with the short-term moving lower, while long-term is moving higher.

The magnitude is not showing investors much, with the current quarter moving down one penny over the last 90 days, from $0.29 to $0.28. For the current year, estimates have moved from $1.24 to $1.27 over that same time period.

Vital Farms, Inc. Price and Consensus

Vital Farms, Inc. price-consensus-chart | Vital Farms, Inc. Quote

Over the last month, we have seen two firms out with strong comments:

On July 8, Mizuho launched coverage of Vital Farms with an Outperform rating and a $45 price target. The firm highlighted Vital Farms as the leader in U.S. pasture-raised eggs and positioned to benefit from strong structural trends in protein consumption and premiumization.

On July 22, Morgan Stanley reaffirmed its Overweight rating for Vital Farms and raised its price target from $39 to $41. The upgrade reflected confidence in Vital Farms’ long-term growth potential in the ethical food market. The analyst cited improving fundamentals and optimism about the company’s ability to execute amidst volatility.

These two upgrades are promising ahead of the earnings on 8/7. Investors should also note that  industry leader CalMaine Foods (CALM) reported a 12% EPS beat, which helped the stock trade all-time highs.

The Technical Take

VITL is down about 7% for the year after falling from summer highs after the CALM quarter helped the stock higher. The stock has dropped over from those recent highs down to the 200-day moving average. This provides a solid entry point for those bullish into the earnings print.

The moving averages are trending sideways, so until that earnings release, the stock is likely stuck. Let’s look at those levels:

21-day moving average: $38

50-day MA: $35.50

200-day MA: $35.25

If the stock can break those recent highs, it would break a 61.8% resistance level that would give extension targets at $57.

In Summary

Vital Farms offers investors a compelling mix of purpose-driven operations, consistent consumer demand, and improving fundamentals. With shares currently hovering near technical support and a key earnings report just around the corner, the setup favors those looking to position ahead of potential upside.

If the company delivers another solid quarter and guidance holds, VITL could break out of its range and push toward new highs, supported by its long-term growth story and commitment to sustainable food production.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research