Bull Of The Day: Vital Farms (VITL)

Core Viewpoint - Vital Farms (VITL) reported strong earnings, beating the Zacks Consensus Estimate, but the stock dropped 12% post-report, marking a potential buying opportunity [1][8]. Company Overview - Vital Farms Inc. is based in Austin, Texas, and offers a variety of pasture-raised food products, including shell eggs, butter, hardboiled eggs, ghee, and liquid whole eggs [2]. Earnings History - The company has consistently topped the Zacks Consensus in the last four quarters, with an average positive earnings surprise of 84.5% [4]. Earnings Estimates Revisions - Annual earnings estimates for Vital Farms have increased, with the full year 2024 estimate rising from $0.94 to $1.11 over the last 90 days, and next year's estimate moving up from $1.13 to $1.19 [5]. Growth - Vital Farms has beaten sales estimates in the last three quarters, with a recent revenue of $147 million, representing a 2.5% revenue surprise. The company is expected to show 26.5% growth in 2024 and 16.7% growth in the following year [6]. Valuation - The forward PE ratio is 28x, aligning with expectations for a growth stock. The price-to-book ratio is 5.5x, while the price-to-sales ratio is 2.5x, which is reasonable given the growth. Operating margins have improved from 5.42% to 8.7% over the last three quarters [7]. Stock Performance - Despite a good earnings report, the stock experienced a 12% drop, marking the first time in six quarters that it did not rise after an earnings beat. The stock has decreased from a recent high of $48, suggesting a potential buying opportunity [8].