William Blair initiated research coverage of Vital Farms, Inc. (VITL $24.71), an ethically minded food company that is disrupting the U.S. food system. Vital Farms has developed a framework that challenges the norms of the factory food model and allows it to bring high-quality products—namely pasture-raised eggs—from a network of family farms to a national audience.
Analyst Jon Andersen estimated that the company would generate EBITDA of $59.3 million in 2024 and $72.1 million in 2025, up from $48.3 million in 2023, and that sales would grow at a strong double-digit rate.
“We believe Vital Farms is well positioned in the large and growing U.S. clean label food industry,” Andersen said, “as its trusted and disruptive brand typically holds a leadership position in the clean label segments in which it competes. The company has codified a proven strategy for profitable growth underpinned by distinctive operating capabilities, and we believe this should enable it to reach its midterm objectives of building a scaled $1 billion brand and maintaining a healthy balance sheet offering capital-allocation optionality.”
Andersen continued, “Vital Farms has become the leading U.S. brand of pasture-raised eggs and the second-largest U.S. egg brand by retail dollar sales. Management seeks to deliver sustainable growth by further penetrating large U.S. food categories with quality clean label products relevant to consumers. This should be enabled in part by acquiring new households and increasing the buy rate by filling distribution white space and implementing awareness- and trial-building marketing. It also targets extending its competitive advantages by further developing its robust and resilient network of family farms and own egg processing infrastructure, and by leveraging its culture and public benefit corporation status.”
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