Vital Farms stock crashes after Q1 losses and margin collapse
Vital Farms saw its stock price collapse after reporting a disappointing first-quarter performance. Shares plunged on May 7 following a net loss and weaker-than-expected margins. The company now faces growing pressure as analysts reassess its outlook. The Austin-based food producer posted a diluted per-share loss of $0.03 in Q1, despite a 15% jump in net revenue. An industry-wide oversupply crisis slashed gross margins by over 1,000 basis points, dropping them to 28.3%. To clear excess stock, the company sold inventory through cheaper channels, taking a financial hit.
Selling, general and administrative (SG&A) expenses surged nearly 39% year-on-year. Additional costs from exiting its butter business further weakened profitability. The poor results triggered a sharp selloff, pushing the stock’s relative strength index (RSI) into the late 20s—a level often seen as oversold.
Before the earnings report, Wall Street had rated VITL a ‘Moderate Buy’ with an average price target of around $21. After the results, Stifel analysts downgraded the stock to ‘hold’ and slashed their target to $10. The share price has now fallen by more than 65% since January. Vital Farms’ valuation remains under close watch as investors wait for signs of margin recovery. The company’s stock continues to trade far below earlier forecasts. Analysts now expect further scrutiny until financial performance stabilises.
