VITL Stock Forecast & Price Target

Vital Farms Inc. has demonstrated robust sales growth, with total sales increasing by 25.4% to $184.8 million, driven by an expansion in egg supply and enhanced distribution efforts. The company's favorable momentum is reflected in raised sales guidance for 2025, now projected to reach at least $770 million, benefiting from strategic investments in brand awareness and marketing. Additionally, expected adjusted EBITDA margin expansion to 12.6% highlights effective management strategies that leverage sales growth and product mix, reinforcing a positive financial outlook for the company.

Vital Farms Inc. is facing a challenging financial outlook primarily due to several adverse factors that may impact its margins in the second half of 2025, including tariff uncertainties, increased promotional activities, and heightened marketing expenditures. The company's gross margin has already contracted by 28 basis points to 38.9%, driven largely by rising labor and overhead costs associated with expansion efforts, despite some offset from pricing and product mix improvements. Additionally, broader economic risks such as commodity cost volatility, consumer spending fluctuations, rising interest rates, and declining consumer confidence may further exacerbate the company's financial pressures.