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Cal-Maine Foods, Inc. CALM has soared 66.6% over the past year against the industry's 15.8% decline. The Basic Materials sector has slipped 3.5% while the S&P 500 has gained 11.6% in the same timeframe.
Cal-Maine Foods has outperformed poultry-related stocks like Post Holdings, Inc. POST, Pilgrim's Pride Corporation PPC and Vital Farms, Inc. VITL, as shown in the chart below.
CALM is currently trading at a forward 12-month price/earnings (P/E) ratio of 17.08X compared with the industry’s 10.19X.
Vital Farms is trading higher at 23.15X, considering its premium brand. Post Holdings and Pilgrim's Pride are cheaper options than Cal-Maine, trading at 15.21X and 8.92X, respectively.
Earnings estimates for Cal-Maine Foods for both 2025 and 2026 have moved down over the past 60 days. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Cal-Maine Foods’ fiscal 2025 earnings is $22.73 per share, indicating a year-over-year upsurge of 299.5%. However, the estimate for fiscal 2026 of $5.71 suggests a 74.9% decline.
According to the U.S. Department of Agriculture (USDA), the highly pathogenic avian influenza (HPAI) outbreaks in U.S. poultry led to the depopulation of 40.2 million birds in 2024 and another 36.3 million this year. This created a supply crunch, catapulting egg prices to record highs.
Riding on these elevated egg prices and robust sales volumes, Cal-Maine Foods has registered increases in its top and bottom-line results over the past few quarters. In the last reported quarter, CALM’s sales skyrocketed 102% year over year to $1.42 billion.
Though the demand for eggs remains strong, supply disruptions from HPAI have been easing lately. According to the U.S. Bureau of Labor Statistics’ latest report, the price of a dozen conventional large white eggs was $3.34 as of June 6, 2025, down from the record high of $6.23 in March 2025 and $5.12 in April.
USDA’s $1-billion comprehensive strategy to curb HPAI and fewer outbreaks suggests that price correction may continue, which can bring Cal-Maine Food’s results back to normal levels.
With customer demand shifting toward cage-free eggs and increasing legislation requiring cage-free compliance, Cal-Maine Foods is investing heavily in its cage-free capacity. Its planned $60 million in capital projects remain on track to add production capacity for 1.1 million cage-free layer hens and 250,000 pullets.
Acquisition of ISE America’s commercial shell egg production and processing assets last year boosted cage-free capacity by 1 million cage-free laying hens. The acquisition of feed mills, storage facilities, usable grain, vehicles, related equipment and retail feed sales business of Deal-Rite Feeds, Inc., was a strategic move to lower production costs and drive efficiencies.
Cal-Maine has recently upped its focus to grow its product portfolio to include value-added egg products. This is evident in its investment in Meadowcreek Foods (hard-cooked eggs) and Crepini Foods (egg products and prepared foods). It recently acquired Echo Lake Foods, which produces, packages, markets and distributes ready-to-eat egg products and breakfast foods.
Cal-Maine Foods’ return on equity — a profitability measure of how prudently the company is utilizing its shareholders’ funds — is 48.72%, way higher than the industry’s 11.96%. It also outpaced the sector’s average of 10.34% and the S&P 500’s 32.01%. CALM’s ROE is also higher than those of Vital Farms (19.53%), Pilgrim's Pride (36.95%) and Post Holdings’ 10.25%.
CALM continues to execute expansion and product diversification efforts well. However, considering the moderating egg prices, CALM’s premium valuation and downward estimate revision activity, selling the stock will be prudent at present. The company currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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