1. Vital Farms, Inc. (NASDAQ:VITL)
Number of Hedge Fund Holders: 30
% of Short Float: 20.68%
Vital Farms, Inc. (NASDAQ:VITL) is a U.S.-based food firm that specializes in pasture-raised shell eggs, butter, and associated goods. The company acquires its products from more than 425 family farms and distributes them to retailers and food service operators. It is continuing to expand its production capacity and supply chain to meet rising demand, establishing itself as a pioneer in ethical food manufacturing.
Vital Farms, Inc. (NASDAQ:VITL) posted solid financial performance for the fourth quarter that ended December 29, 2024, exceeding expectations. The company reported an EPS of $0.23, which exceeded the projected $0.15. Net revenue for the full fiscal year 2024 was $606.3 million, a 28.5% increase year-over-year. Higher sales volumes, brand expansion, and an increase in the number of family farms all contributed to growth. Additionally, butter sales increased by 11% year-on-year, contributing to overall revenue growth. However, supply shortages damaged year-end inventory, resulting in a predicted temporary slowdown in early 2025 growth.
As of the writing of this article, Vital Farms, Inc. (NASDAQ:VITL) stock fell by nearly 16% year to date due to an issue with its accounting practices overshadowing better-than-expected earnings. According to Bloomberg, the company discovered anomalies in order tracking and invoicing, which had an impact on reported revenue and raised questions about financial integrity. While it has generally avoided the brunt of the avian flu’s effects, these reporting flaws have weighed on investor confidence. The stock’s slide reflects increased volatility in some of the worst-performing small-cap agricultural equities, underscoring investor concern in the sector.
Despite industry-wide issues such as avian influenza, which has reduced egg supply, Vital Farms, Inc. (NASDAQ:VITL) is taking proactive initiatives to manage risks. It wants to develop its egg grading and packing facilities in Missouri, increasing production capacity by 30% by the end of 2025. The company is also recruiting new farms, with 125 more expected to be completely operational by the fourth quarter of 2025. These developments will increase supply chain resilience and help satisfy rising customer demand.
Overall, Vital Farms, Inc. (NASDAQ:VITL) ranks first on our list of the Worst Small Cap Agriculture Stocks to Buy. While we acknowledge the potential of VITL, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than VITL but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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