Hedge funds cut NFLX, keep big bets on MSFT, AMZN, add NVDA
On Friday, Telsey Advisory Group adjusted its price target for Vital Farms (NASDAQ:VITL) shares, reducing it to $46 from the previous $52, while sustaining an Outperform rating on the stock. Currently trading at $32.57, InvestingPro analysis suggests the stock is undervalued, with a "GREAT" overall financial health score. The adjustment follows Vital Farms’ first-quarter earnings for 2025, which presented a mixed outcome with sales falling short of expectations but adjusted EBITDA surpassing forecasts.
Vital Farms reported an adjusted EPS of $0.37 for the first quarter, outperforming both Telsey’s estimate of $0.27 and the FactSet consensus of $0.26. This beat was largely attributed to a stronger-than-anticipated adjusted EBITDA margin of 16.9%, compared to Telsey’s projection of 13.3% and FactSet’s 12.9%. The company’s solid performance is reflected in its strong fundamentals, with InvestingPro data showing impressive revenue growth of 24% over the last twelve months and a healthy current ratio of 3.35. However, sales growth was lower than anticipated at 9.6%, reaching $162.2 million, which is below Telsey’s target of $166 million and the FactSet consensus of $163 million.
The company’s performance was influenced by strong demand for pasture-raised eggs, a trend partly driven by favorable macro trends and an industry-wide shortage caused by avian flu. The supply constraints, light inventory levels, and challenging year-over-year comparisons contributed to the slower sales growth in the first quarter.
Despite the mixed results, Vital Farms reaffirmed its full-year 2025 guidance, expecting sales growth of at least 22% to reach a minimum of $740 million, aligning with Telsey’s forecast. The company also anticipates adjusted EBITDA to be at least $100 million, which is in line with Telsey’s predictions.
Looking ahead to the second half of 2025, Vital Farms is optimistic about its growth prospects, anticipating strong gains from an increase in supply. The opening of its new expanded Egg Central Station facility in Missouri is expected to support the company’s ability to meet the high demand for its products. With a market capitalization of $1.45 billion and a P/E ratio of 31.91, the company shows promising growth potential. Additionally, the company has implemented a low single-digit price increase to mitigate higher costs, including those resulting from tariffs. For deeper insights into Vital Farms’ growth trajectory and comprehensive financial analysis, access the full Pro Research Report available on InvestingPro.
In other recent news, Vital Farms Inc . announced its Q1 2025 earnings, reporting an earnings per share (EPS) of $0.37, which exceeded analyst expectations of $0.28 by 32.1%. However, the company’s revenue fell short of forecasts, coming in at $162.6 million against the expected $164.8 million. Despite the earnings beat, the slight revenue miss has raised concerns among investors. The company also reported a strong cash position with $161.3 million and no debt, indicating robust financial health. The butter segment of Vital Farms showed impressive growth, with a 41% year-over-year increase. Looking forward, the company projects full-year net revenue of at least $740 million, a 22% increase from the previous year, and aims for $1 billion in net revenue by 2027. Meanwhile, analysts from firms such as D.A. Davidson and TD Cowen have shown interest in the company’s pricing strategies and supply chain developments. Vital Farms continues to expand its farm network, adding approximately 25 farms in Q1 2025, which aligns with its growth strategy.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.