VITL Stock Forecast & Price Target

Vital Farms Inc. demonstrated robust financial performance, with total sales increasing by 22.2% to $166 million, driven by significant growth in both egg and butter categories. The company's gross margin improved by 280 basis points to 36.1%, supported by higher sales volume and operational efficiencies. With a strong pipeline of family farms and an expansion of its Egg Central Station facility, Vital Farms is positioned for continued growth, as evidenced by an increased FY25 adjusted EBITDA estimate to $101 million and the introduction of a FY26 EBITDA forecast of $116.7 million.

Vital Farms Inc. faces a challenging outlook, as the adjusted EBITDA margin is expected to decline in 2025 due to the erosion of prior operational efficiencies and rising commodity costs. Additionally, the company has revised its first-quarter adjusted EBITDA forecast downward, highlighting anticipated slower sales growth of approximately 12%, partly attributed to supply constraints and reduced inventory levels that hinder the capacity to satisfy rising demand. Finally, a disclosed material weakness in internal controls over financial reporting raises further concerns about the company's financial stability and governance, which could negatively impact investor confidence and operational performance.