Investment Highlights
Why It Matters
Which of these 2 stories sounds closer for this stock?
1. Generates cash flow
The stock generated 4% or more of the share price (called cash flow yield), and shows moderate 10-15% or more growth.
2. Riding a trend
Think Tesla during the pandemic of 2020 when EVs were riding a cultural high, or Nvidia in the current AI boom, or even Figma. These companies don’t have enough yield, or, enough growth, or both - however - they are riding a trend. They have momentum. These can be more volatile - they don’t have the floor of strong cash flow
0
Strong revenue growthRev Chg LTMRevenue Change % Last Twelve Months (LTM) is 24%
Expensive valuation multiplesP/CFOPrice/(Cash Flow from Operations). CFO is cash before capital expenditures. is 36x
1
Not cash flow generativeFCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is -2.7%
0
Strong revenue growthRev Chg LTMRevenue Change % Last Twelve Months (LTM) is 24%
1
Expensive valuation multiplesP/CFOPrice/(Cash Flow from Operations). CFO is cash before capital expenditures. is 36x
2
Not cash flow generativeFCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is -2.7%
1. General Market Weakness or Sector-Specific Headwinds: The broader market or the consumer staples sector might have experienced a downturn during the period from late July to early November 2025, which could have put downward pressure on Vital Farms' stock. One report indicated that Vital Farms' shares produced a disappointing 11.9% loss over the last six months leading up to November 3, 2025, contrasting with the S&P 500's 5.2% gain during the same period, suggesting underperformance relative to the broader market.
2. Rising Production and Input Costs: Throughout the food sector, including organic egg production, companies may have faced persistent challenges with increasing input costs such as feed, labor, and logistics. These rising costs could impact profitability margins and investor sentiment despite strong revenue growth.
1. General Market Weakness or Sector-Specific Headwinds: The broader market or the consumer staples sector might have experienced a downturn during the period from late July to early November 2025, which could have put downward pressure on Vital Farms' stock. One report indicated that Vital Farms' shares produced a disappointing 11.9% loss over the last six months leading up to November 3, 2025, contrasting with the S&P 500's 5.2% gain during the same period, suggesting underperformance relative to the broader market.
2. Rising Production and Input Costs: Throughout the food sector, including organic egg production, companies may have faced persistent challenges with increasing input costs such as feed, labor, and logistics. These rising costs could impact profitability margins and investor sentiment despite strong revenue growth.
3. Concerns over Avian Flu Outbreaks: The recurring threat of avian flu outbreaks can create significant uncertainty for investors in egg producers, as such events can lead to widespread culls, supply shortages, and price volatility. Although no direct impact on retail egg prices was noted, the risk of a large-scale outbreak could remain a concern.
4. Competitive Landscape and Market Saturation Fears: Despite its premium positioning, Vital Farms operates in a competitive and evolving market. Concerns about increased competition, the growth of plant-based substitutes, or potential overcapacity in the organic egg market could have led to investor apprehension regarding long-term growth sustainability.
5. Valuation Adjustments or Profit-Taking: Even with strong underlying business performance and positive analyst ratings, a stock can experience declines due to valuation adjustments or profit-taking by investors, especially if it had seen significant gains in previous periods. The decline occurred despite positive Q3 2025 earnings and raised guidance, suggesting other factors were at play over the longer timeframe.
[1] Cumulative total returns since the beginning of 2020 [2] Peers: BG, DAR, LMNR, AFRI, DTCK. [3] Win Rate = % of calendar months in which monthly returns were positive [4] Max drawdown represents maximum peak-to-trough decline within a year [5] 2025 data is for the year up to 11/7/2025 (YTD)
Vital Farms, Inc., an ethical food company, provides pasture-raised products in the United States. It offers shell eggs, butter, hard-boiled eggs, ghee, liquid whole eggs, and egg bite products. Vital Farms, Inc. was founded in 2007 and is headquartered in Austin, Texas.
[1] Choosing top 10 best bets from each sector quarterly is an alpha producing strategy vs sector benchmark [2] Historical annualized return of 8.7%, alpha of 1.4%, and sharpe of 0.5
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
Comparison of VITL With Other Asset Classes (Last 1Y)
VITL
Sector ETF
Equity
Gold
Commodities
Real Estate
Bitcoin
Annualized Return
0.3%
-2.7%
18.9%
45.7%
0.7%
-1.3%
49.7%
Annualized Volatility
54.7%
13.9%
19.6%
19.9%
16.1%
18.0%
37.2%
Sharpe Ratio
0.20
-0.43
0.76
1.78
-0.14
-0.22
0.85
Correlation With Other Assets
12.8%
22.4%
-7.9%
5.6%
15.1%
7.1%
ETFs used for asset classes: Sector ETF = XLP, Equity = SPY, Gold = GLD, Commodities = DBC, Real Estate = VNQ, and Bitcoin = BTCUSD Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 5-Year Data
Comparison of VITL With Other Asset Classes (Last 5Y)
VITL
Sector ETF
Equity
Gold
Commodities
Real Estate
Bitcoin
Annualized Return
0.1%
6.9%
17.1%
15.9%
13.8%
7.2%
49.2%
Annualized Volatility
52.4%
13.1%
17.1%
15.6%
18.9%
19.1%
49.3%
Sharpe Ratio
0.20
0.33
0.81
0.82
0.61
0.29
0.76
Correlation With Other Assets
12.8%
24.1%
2.5%
3.2%
18.8%
11.2%
ETFs used for asset classes: Sector ETF = XLP, Equity = SPY, Gold = GLD, Commodities = DBC, Real Estate = VNQ, and Bitcoin = BTCUSD Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 10-Year Data
Comparison of VITL With Other Asset Classes (Last 10Y)
VITL
Sector ETF
Equity
Gold
Commodities
Real Estate
Bitcoin
Annualized Return
-0.3%
7.1%
14.3%
12.9%
5.1%
5.3%
77.5%
Annualized Volatility
52.4%
14.7%
18.0%
14.7%
17.7%
20.9%
56.2%
Sharpe Ratio
0.19
0.36
0.69
0.72
0.22
0.23
0.95
Correlation With Other Assets
13.8%
25.6%
4.0%
4.6%
19.3%
12.1%
ETFs used for asset classes: Sector ETF = XLP, Equity = SPY, Gold = GLD, Commodities = DBC, Real Estate = VNQ, and Bitcoin = BTCUSD Smart multi-asset allocation framework can stack odds in your favor. Learn How
