Ricardo Pillai
3 min read
In This Article:
We came across a bullish thesis on Vital Farms, Inc. on Kroker Equity Research's Substack. In this article, we will summarize the bull’s thesis on VITL. Vital Farms, Inc.'s share was trading at $35.75 as of 19th June. VITL’s trailing and forward P/E ratios were 31.92 and 208.33, respectively, according to Yahoo Finance.
Vital Farms, Inc. (VITL) is a mission-driven, high-growth food company specializing in ethically produced, pasture-raised eggs and butter. With a network of over 425 family farms, Vital Farms operates a unique supply chain emphasizing animal welfare and sustainable practices. Its flagship product—pasture-raised shell eggs—drives 93–95% of revenue, though its premium butter and prepared egg lines are growing.
The company has scaled significantly, with revenue surging from $141 million in 2019 to $606 million in 2024, and profitability inflecting meaningfully over the past two years. In 2024, net income more than doubled to $53.4 million, and Adjusted EBITDA reached $86.7 million, reflecting expanding margins and strong operating leverage. Early 2025 results affirm this trajectory, with Q1 revenue up 9.6% and EPS of $0.37. Vital Farms aims to achieve $1 billion in revenue by 2027, supported by capacity expansions, including a second egg-processing facility expected by 2027.
Despite heavy reliance on eggs, the brand has built a loyal following through transparent practices, premium quality, and certifications like B Corp and Certified Humane. Investors are drawn to its accelerating growth and leading position in the premium food space, though concerns around valuation, input cost volatility, biosecurity risks, and a recently disclosed internal control weakness temper the outlook.
The stock trades at a high P/E (~30x), requiring consistent execution to justify the premium. With no dividends or buybacks, returns rely on capital appreciation. Still, for long-term investors bullish on ethical consumerism, Vital Farms offers a compelling, albeit volatile, growth story backed by secular trends and strong brand equity.
Previously, we covered a bullish thesis on Vital Farms, Inc. (VITL) by Ill_Ad_2065 in December 2024, which highlighted the company’s robust growth, strong balance sheet, and quality fundamentals despite a premium valuation. The company’s stock price has depreciated by approximately 5% since our coverage. This is because the thesis didn’t fully play out due to valuation concerns and market volatility. Vital Farms continues to deliver solid growth and operational execution. Kroker Research shares a similar view but emphasizes recent execution milestones and a clear roadmap to $1 billion in revenue.
