When Should You Buy Vital Farms, Inc. (NASDAQ:VITL)?

Vital Farms, Inc. (NASDAQ:VITL), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the NASDAQGM over the last few months. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine Vital Farms’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Vital Farms

What's The Opportunity In Vital Farms?

According to our valuation model, Vital Farms seems to be fairly priced at around 8.68% above our intrinsic value, which means if you buy Vital Farms today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $38.99, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, Vital Farms has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will Vital Farms generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Vital Farms' earnings over the next few years are expected to increase by 33%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? VITL’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on VITL, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

It can be quite valuable to consider what analysts expect for Vital Farms from their most recent forecasts. At Simply Wall St, we have the analysts estimates which you can view by clicking here.

If you are no longer interested in Vital Farms, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.