BMO Capital has reaffirmed its positive long-term outlook for Vital Farms (VITL), despite revising its 2025 revenue and earnings expectations downward. The firm highlights sustained demand for organic and sustainable protein products as a key driver of future growth.
- BMO Capital revised 2025 revenue forecast for VITL to $285 million from $310 million
- EBITDA estimate adjusted to $58 million, down from $65 million
- Gross margin expected to improve to 58% by end of 2025 from 54% in Q3
- Direct-to-consumer sales grew 12% YoY in 2025
- VITL secured over 40 new retail placements in 2025
- Stock rose 2.8% in after-hours trading following announcement
BMO Capital has maintained a favorable long-term investment thesis for Vital Farms (VITL), underscoring confidence in the company's strategic positioning within the organic protein sector. The firm acknowledged a near-term revision to its 2025 financial forecasts, reducing projected revenue to $285 million from an earlier estimate of $310 million and adjusting EBITDA projections to $58 million, down from $65 million. Despite these downward revisions, BMO emphasized that underlying operational metrics—such as customer retention, direct-to-consumer sales growth, and expanded retail distribution—remain strong. The adjustments reflect temporary headwinds, including elevated input costs and supply chain disruptions in key sourcing regions, which affected Q4 2025 operational performance. However, BMO noted that Vital Farms has successfully implemented cost optimization measures, including renegotiated supplier contracts and increased automation in processing facilities, which are expected to improve margins in 2026. The firm expects the company’s gross margin to stabilize at 58% by year-end, up from 54% in Q3 2025. Vital Farms’ focus on pasture-raised and regenerative agriculture continues to resonate with consumers, with direct-to-consumer sales growing 12% year-over-year and over 40 new retail store placements secured in 2025. These developments support BMO’s view that the company is well-positioned to capture long-term demand in the premium protein segment, particularly in North America and select European markets. The stock reacted positively in after-hours trading, gaining 2.8% on the news, reflecting investor reassurance about the company’s resilience. Institutional investors and fund managers focused on sustainable agriculture and food innovation are likely to view the revised outlook as a prudent recalibration rather than a sign of deterioration.