VITLNASDAQThe short version
Vital Farms, Inc.
Vital Farms is the pasture-raised egg brand that turned an ethical-sourcing niche into a $759 million business, then watched its stock fall roughly 75% as an avian-flu-inflated windfall began to unwind.
The shares ran from about $8 in mid-2022 to a $52.41 peak in August 2025, then gave back roughly three-quarters to $13.02 by July 2026.
$13.02
Share price
$599M
Market cap
$759M
FY2025 revenue
$51M
Net cash, no debt
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Financials
Revenue tripled in four years; free cash flow just turned negative
FY2021 → FY2025as reported · $
Revenue$759M+25%
Gross margin37.6%−0.3pp
Operating margin11.6%+1.2pp
Net income$66M+24%
EPS$1.44+22%
Free cash flow−$48M−$84M
Open the full statements →As-reported income and cash-flow statements, FY2021–FY2025.
- Growth. Net revenue climbed from $471.9M in FY2023 to $606.3M in FY2024 to $759.4M in FY2025, a 25% gain last year; diluted EPS rose from $0.59 to $1.18 to $1.44.
- Margins. Gross margin held near 37–38% and operating margin reached 11.6% in FY2025, up from 7.0% two years earlier as scale and pricing flowed through.
- Cash. Free cash flow swung to −$48.2M in FY2025 as capital spending jumped to $82.0M from $28.6M; operating cash flow still ran positive at $33.7M.
Valuation
The cheap multiple divides by a peak the company no longer guides to
Adjusted EBITDA ($M)
Guidance for FY2026 adjusted EBITDA fell from $105–115M to $0–10M in a single quarter.
- Vital Farms' windfall was cheap first-time trial (new-buyer share above 55% in 2024-2025 falling to 50% in Q1 FY2026), not pricing on its own shelf, and it is that trial reversal that drove management to cut FY2026 adjusted-EBITDA guidance from $105-115M to $0-10M in one quarter — so the 4.8x trailing EV/EBITDA that makes the stock look cheap divides by a $114M FY2025 peak the company no longer guides to.
- The arithmetic. On the ~$5M the company now guides to for FY2026, the $548M enterprise value is roughly 110x — not a meaningful multiple; on the $114M FY2025 peak it is 4.8x.
- The other side. Half of FY2025 executive equity vests only on fiscal-2027 revenue and adjusted-EBITDA margin, and nearly the whole board and several officers bought stock in the open market through the drawdown.
Balance sheet
A debt-free anchor is converting into an active revolver draw
Cash + securities ($M)
The liquid cushion fell $61.9M in one quarter against $105–140M of disclosed twelve-month cash calls.
- The debt-free balance sheet framed as the margin of safety ($48.8M cash, no funded debt, $351.3M equity at FY2025 year-end) saw its liquid cushion fall from $113.4M to $51.4M in a single quarter
- against disclosed twelve-month cash calls of roughly $105-140M that exceed even the cushion plus the full $60M revolver — and management has now stated it 'will start using the revolver,' so the anchor is converting from zero debt to an active draw.
- The other side. Most of those calls are discretionary or self-liquidating — the Vital Crossroads build is being slowed and supply-control costs are trough-specific — the company carries no maturities, and management says existing liquidity covers at least twelve months.
At Q1's pace — operating cash flow used $18.6M — the $51.4M cushion plus the $60M revolver funds only a few quarters before loss-year covenants (net leverage ≤3.25x, FCCR ≥1.35x) would bind.
The setup
A former market darling, down about 75% while the business kept growing
−75%
From the 2025 peak
+25%
FY2025 revenue growth
9x
Trailing P/E
4.8x
Trailing EV/EBITDA
- Fallen star. The shares peaked at $52.41 in August 2025 and now trade at $13.02, a roughly 75% drawdown, even as net revenue grew 25% in the same year.
- Margin of safety. Vital Farms holds $48.8M of cash and no funded debt, with $351.3M of equity — the balance sheet the report treats as its cushion.
- Cheap on the surface. At 9x trailing earnings and 4.8x trailing EBITDA the stock screens cheap, but only if FY2025's $114M of EBITDA proves repeatable.
The record
Revenue nearly tripled and profit went from breakeven to $66M
Revenue and net income ($M)
Net revenue grew from $260.9M to $759.4M; net income from $2.4M to $66.3M, FY2021–FY2025.
- Scale. Net revenue compounded from $260.9M in FY2021 to $759.4M in FY2025, and the brand now sells through more than 23,000 stores.
- Profit inflection. Net income moved from near-breakeven in FY2021–FY2022 to $66.3M in FY2025 as gross margin rose from 31.8% to 37.6%.
- The question underneath. How much of that surge was durable brand-building and how much a cyclical windfall from avian-flu-inflated egg prices is what the report works through.
Industry
Pasture-raised is the fastest-growing corner of the egg aisle
Egg category volume CAGR (%)
Pasture-raised volumes compounded about 27% a year while conventional eggs shrank.
- Tailwind. Pasture-raised egg volumes grew about 27% a year while conventional eggs declined roughly 6%, a structural shift toward welfare-labeled eggs.
- Category scale. The pasture-raised category reached about $1.3B of sales in 2025, up from $303M in 2021, as household penetration rose from 5.0% to 10.5%.
- Share normalizing. Vital Farms' share of that category fell from over 90% toward the mid-50s as the category grew and drew in new entrants.
The moat
Brand health kept improving even as category share normalized
Brand-health metrics vs 2020
| Metric | Latest | Since 2020 |
|---|---|---|
| Household penetration | 11.9% | +6.2 pts |
| Household retention | 51% | +5 pts |
| Aided awareness | 33% | +16 pts |
| Items per retailer | 2.7 | +43% |
| Shelf velocity (u/s/w) | 66 | +68% |
- Retention. Just over half of households that try Vital Farms come back, and aided awareness reached 33% — evidence the premium buys loyalty, not only trial.
- Distribution. Items carried per retailer rose 43% to 2.7 and shelf velocity is up 68%, so the brand is deepening on-shelf, not just adding doors.
- Caveat. Those gains sit against a falling category share and a first-time-trial rate that slipped from above 55% to 50% in early 2026.
Growth mix
Recent growth leaned on price and first-time trial, not just volume
Revenue growth by source ($M added)
In FY2025, price/mix added $74.9M — nearly as much as volume's $78.3M.
- Trial reversal. New-buyer share sat above 55% in 2024–2025 and fell to 50% in Q1 FY2026 as the price gap to conventional eggs widened — the core of the report's cyclical read.
- Price did heavy lifting. Price/mix contributed $74.9M of FY2025's revenue growth, almost matching volume's $78.3M, flattering results while egg prices stayed elevated.
- What reverses. Management is now cutting shelf prices to re-cross demand; the swing shows first in volume, guided to turn positive around Q3 2026.
Unit economics
Gross margin fell 10 points in a year; a recovery is guided
Gross margin (%)
Q1 gross margin fell from 38.5% to 28.3% on breaker mix and supply-management cost; guided back to 30% by late 2026.
- The drop. Q1 gross margin fell from 38.5% to 28.3% year over year — about 2.6 points from excess breaker mix and 7.6 from supply management and price investment.
- Self-inflicted. Roughly $32M of 2026 cost comes from managing an oversupply of eggs the company built ahead of demand — a trough cost, not a broken model.
- Recovery path. Management guides gross margin back to 30% by late Q4 2026 and a double-digit adjusted-EBITDA margin in 2027 as those costs roll off.
Insiders
The founder trimmed his stake, but the board bought the drawdown
Selected open-market buys, May 2026
| Insider | Role | Buy price |
|---|---|---|
| Gisel Ruiz | Director | $8.13 |
| William Cyr | Director | $8.52 |
| Glenda Flanagan | Director | $8.33 |
| Peter Pappas | Chief Sales Officer | $8.51 |
| Joseph Holland | Chief Supply Chain Officer | $8.00 |
- Skin in the game. Nearly the whole board and several officers bought stock in the open market in May 2026 near $8 a share, during the drawdown.
- Founder selldown. Co-founder ownership fell from about 27% in 2021 to roughly 16% by 2025–2026, mostly through pre-planned sales as the stock ran up.
- Pay alignment. Half of FY2025 executive equity vests only on fiscal-2027 revenue and adjusted-EBITDA margin, tying payout to the guided recovery.
The estimates
FY2026 is guided as a sharp, single-year profit trough
$775–800M
FY2026 revenue guide
$0–10M
FY2026 adj. EBITDA
−$0.42
FY2026E diluted EPS
$0.44
FY2027E diluted EPS
- Revenue holds. Guidance calls for $775–800M of FY2026 revenue, roughly flat, so the trough is in profit, not sales — a margin event, not a demand collapse.
- Profit resets. Adjusted EBITDA is guided to $0–10M from $114M, and consensus sees a FY2026 loss near −$0.42 before a return to about $0.44 in FY2027.
- Capex-heavy. The company is spending $70–75M on capacity even through the trough, which keeps free cash flow negative near-term.
Scenarios
Between a $6 bear and a $29 bull, the price sits near the middle
Implied value per share (FY2027 basis)
Bear (~$40M EBITDA)
$6
Base (~$85M EBITDA)
$16
Bull (~$117M EBITDA)
$29
Illustrative scenarios on management's FY2027 targets; each adds $51M net cash on ~46M shares.
- What the price assumes. Working the $548M enterprise value backwards, today's price discounts roughly $55M of sustainable EBITDA — about half the FY2025 peak, well above the ~$5M FY2026 guide.
- Base case. At about $85M of FY2027 EBITDA the enterprise value is near 6.4x, implying roughly $16 a share, about 22% above today, if the recovery lands.
- What decides it. Gross margin tracking back to a 30% exit rate by late 2026 moves the base case toward the bull column; another cut to the EBITDA path moves it toward the $6 bear.
What to watch
A debt-free fallen star priced between a cyclical peak and a genuine reset
- 01Underlying gross margin back toward 30% by late Q4 2026 — or stalling below it
- 02New-buyer (trial) share recovering toward 55%+ as shelf price gaps narrow
- 03Revenue-generating volume turning positive around Q3 2026
- 04Cash plus securities stabilizing above the $60M revolver rather than drawing deeper
This distills a guided study built chapter by chapter from the company's filings, calls, and disclosures.
Compiled from the full report · 2026-07-26 · For information, not investment advice.