VITL Stock Forecast & Price Target

Vital Farms Inc. has demonstrated robust financial performance, with total sales increasing by 25.4% to $184.8 million, driven by a favorable product mix and effective management of commodity costs. The company's gross margin saw an expansion of 80 basis points to 37.7%, indicating improved profitability despite higher overhead costs. Additionally, with the recent operational start of a new production line at the Egg Central Station facility, Vital Farms is positioned for sustained growth in the coming quarters, supported by an enhanced supply of eggs and expanded distribution channels.

Vital Farms Inc. has reduced its capital expenditure guidance, indicating a shift in strategy that may hinder growth potential as capex was lowered to a range of $80 million to $100 million from a prior estimate of $90 million to $110 million. The company faces pressures on 2H25 margins due to increased promotional activities, higher marketing spend, and uncertainty surrounding tariffs, which could adversely affect profitability. Additionally, the gross margin has compressed slightly to 38.9%, reflecting rising labor and overhead costs associated with expansion, compounded by external risks such as volatility in commodity costs and potential declines in consumer confidence.