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Vital Farms, Inc. (VITL) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Vital Farms (VITL - Free Report) ? Shares have been on the move with the stock up 30% over the past month. The stock hit a new 52-week high of $20.85 in the previous session. Vital Farms has gained 26.8% since the start of the year compared to the 1.3% move for the Zacks Consumer Staples sector and the 2.6% 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 March 7, 2024, Vital Farms reported EPS of $0.17 versus consensus estimate of $0.14.
Valuation Metrics
While Vital Farms has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? 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 these give investors a variety of ways to comb 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Vital Farms has a Value Score of C. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 28.2X current fiscal year EPS estimates, which is a premium to the peer industry average of 17.5X. On a trailing cash flow basis, the stock currently trades at 87.7X versus its peer group's average of 11.1X. 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 #2 (Buy) thanks to rising earnings estimates.
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 a bit more room to run in the near term.
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 Freshpet, Inc. (FRPT - Free Report) . FRPT has a Zacks Rank of # 2 (Buy) and a Value Score of D, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. Freshpet, Inc. beat our consensus estimate by 244.44%, and for the current fiscal year, FRPT is expected to post earnings of $0.04 per share on revenue of $952.89 million.
Shares of Freshpet, Inc. have gained 23.9% over the past month, and currently trade at a forward P/E of 2631.27X and a P/CF of 180.79X.
The Food - Miscellaneous industry may rank in the bottom 57% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for VITL and FRPT, even beyond their own solid fundamental situation.
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Vital Farms, Inc. (VITL) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Vital Farms (VITL - Free Report) ? Shares have been on the move with the stock up 30% over the past month. The stock hit a new 52-week high of $20.85 in the previous session. Vital Farms has gained 26.8% since the start of the year compared to the 1.3% move for the Zacks Consumer Staples sector and the 2.6% 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 March 7, 2024, Vital Farms reported EPS of $0.17 versus consensus estimate of $0.14.
Valuation Metrics
While Vital Farms has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? 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 these give investors a variety of ways to comb 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Vital Farms has a Value Score of C. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 28.2X current fiscal year EPS estimates, which is a premium to the peer industry average of 17.5X. On a trailing cash flow basis, the stock currently trades at 87.7X versus its peer group's average of 11.1X. 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 #2 (Buy) thanks to rising earnings estimates.
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 a bit more room to run in the near term.
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 Freshpet, Inc. (FRPT - Free Report) . FRPT has a Zacks Rank of # 2 (Buy) and a Value Score of D, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. Freshpet, Inc. beat our consensus estimate by 244.44%, and for the current fiscal year, FRPT is expected to post earnings of $0.04 per share on revenue of $952.89 million.
Shares of Freshpet, Inc. have gained 23.9% over the past month, and currently trade at a forward P/E of 2631.27X and a P/CF of 180.79X.
The Food - Miscellaneous industry may rank in the bottom 57% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for VITL and FRPT, even beyond their own solid fundamental situation.