Yahoo Finance Vital Farms, Inc. (VITL) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Vital Farms (VITL)? Shares have been on the move with the stock up 13.2% over the past month. The stock hit a new 52-week high of $45.84 in the previous session. Vital Farms has gained 191.4% since the start of the year compared to the 2.3% move for the Zacks Consumer Staples sector and the -2.5% return for the Zacks Food - Miscellaneous industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 9, 2024, Vital Farms reported EPS of $0.43 versus consensus estimate of $0.23.
For the current fiscal year, Vital Farms is expected to post earnings of $0.94 per share on $578.5 million in revenues. This represents a 59.32% change in EPS on a 22.6% change in revenues. For the next fiscal year, the company is expected to earn $1.14 per share on $677.77 million in revenues. This represents a year-over-year change of 21.28% and 17.16%, respectively.
Valuation Metrics
Vital Farms may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Vital Farms has a Value Score of F. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 48.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 16.9X. On a trailing cash flow basis, the stock currently trades at 50.1X versus its peer group's average of 10.5X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Vital Farms currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Vital Farms passes the test. Thus, it seems as though Vital Farms shares could have potential in the weeks and months to come.
How Does VITL Stack Up to the Competition?
Shares of VITL have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is The Chefs' Warehouse, Inc. (CHEF). CHEF has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of C.
Earnings were strong last quarter. The Chefs' Warehouse, Inc. beat our consensus estimate by 114.29%, and for the current fiscal year, CHEF is expected to post earnings of $1.37 per share on revenue of $3.76 billion.
Shares of The Chefs' Warehouse, Inc. have gained 1.3% over the past month, and currently trade at a forward P/E of 29.14X and a P/CF of 14.61X.
The Food - Miscellaneous industry is in the top 35% of all the industries we have in our universe, so it looks like there are some nice tailwinds for VITL and CHEF, even beyond their own solid fundamental situation.
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Vital Farms, Inc. (VITL) : Free Stock Analysis Report
The Chefs' Warehouse, Inc. (CHEF) : Free Stock Analysis Report
