As of June 15, 2025, Vital Farms Inc has a Discounted Cash Flow (DCF) derived fair value of $71.54 per share. With the current market price at $31.65, this represents a potential upside of 126.0%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $46.75 |
| DCF Fair Value (10-year) | $71.54 |
| Potential Upside (5-year) | 47.7% |
| Potential Upside (10-year) | 126.0% |
| Discount Rate (WACC) | 5.3% - 6.8% |
Revenue is projected to grow from $606 million in 12-2024 to $2047 million by 12-2034, representing a compound annual growth rate of approximately 12.9%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 606 | 28% |
| 12-2025 | 749 | 24% |
| 12-2026 | 885 | 18% |
| 12-2027 | 1035 | 17% |
| 12-2028 | 1193 | 15% |
| 12-2029 | 1409 | 18% |
| 12-2030 | 1536 | 9% |
| 12-2031 | 1660 | 8% |
| 12-2032 | 1788 | 8% |
| 12-2033 | 1913 | 7% |
| 12-2034 | 2047 | 7% |
Net profit margin is expected to improve from 9% in 12-2024 to 8% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 53 | 9% |
| 12-2025 | 63 | 8% |
| 12-2026 | 75 | 8% |
| 12-2027 | 88 | 8% |
| 12-2028 | 101 | 8% |
| 12-2029 | 119 | 8% |
| 12-2030 | 130 | 8% |
| 12-2031 | 141 | 8% |
| 12-2032 | 151 | 8% |
| 12-2033 | 162 | 8% |
| 12-2034 | 173 | 8% |
with a 5-year average of $16 million. Projected CapEx is expected to maintain at approximately 4% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 20 |
| 12-2026 | 24 |
| 12-2027 | 31 |
| 12-2028 | 39 |
| 12-2029 | 45 |
| 12-2030 | 52 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 35 |
| Days Inventory | 34 |
| Days Payables | 38 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 74 | 15 | 24 | 19 | 15 |
| 2026 | 116 | 24 | 38 | 4 | 51 |
| 2027 | 139 | 28 | 44 | 10 | 57 |
| 2028 | 163 | 32 | 51 | 17 | 64 |
| 2029 | 192 | 38 | 60 | 15 | 80 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 46.75 | 47.7% |
| 10-Year DCF (Growth) | 71.54 | 126.0% |
| 5-Year DCF (EBITDA) | 40.93 | 29.3% |
| 10-Year DCF (EBITDA) | 56.76 | 79.3% |
Is Vital Farms Inc (VITL) a buy or a sell? Vital Farms Inc is definitely a buy. Based on our DCF analysis, Vital Farms Inc (VITL) appears to be significantly undervalued with upside potential of 126.0%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $31.65.