VITAL FARMS INC (NASDAQ:VITL), a strong growth stock, setting up for a breakout.

In this article, we'll take a closer look at VITAL FARMS INC (NASDAQ:VITL) as a potential candidate for growth investing. While it's important for investors to conduct their own research, VITAL FARMS INC has piqued our interest by appearing on our strong growth and breakout radar. Let's explore further.

How We Gauge Growth for VITL

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of VITL, the assigned 9 reflects its growth potential:

• The Earnings Per Share has grown by an impressive 103.45% over the past year.
• VITL shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 81.54% yearly.
• Looking at the last year, VITL shows a very strong growth in Revenue. The Revenue has grown by 28.51%.
• VITL shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 33.93% yearly.
• The Earnings Per Share is expected to grow by 20.09% on average over the next years. This is a very strong growth
• Based on estimates for the next years, VITL will show a very strong growth in Revenue. The Revenue will grow by 20.73% on average per year.

Assessing Health for VITL

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. VITL scores a 9 out of 10:

• VITL has an Altman-Z score of 13.82. This indicates that VITL is financially healthy and has little risk of bankruptcy at the moment.
• VITL's Altman-Z score of 13.82 is amongst the best of the industry. VITL outperforms 98.89% of its industry peers.
• VITL has a debt to FCF ratio of 0.33. This is a very positive value and a sign of high solvency as it would only need 0.33 years to pay back of all of its debts.
• VITL has a Debt to FCF ratio of 0.33. This is amongst the best in the industry. VITL outperforms 92.22% of its industry peers.
• A Debt/Equity ratio of 0.03 indicates that VITL is not too dependend on debt financing.
• VITL's Debt to Equity ratio of 0.03 is fine compared to the rest of the industry. VITL outperforms 80.00% of its industry peers.
• A Current Ratio of 3.13 indicates that VITL has no problem at all paying its short term obligations.
• VITL's Current ratio of 3.13 is amongst the best of the industry. VITL outperforms 84.44% of its industry peers.
• A Quick Ratio of 2.83 indicates that VITL has no problem at all paying its short term obligations.
• VITL has a Quick ratio of 2.83. This is amongst the best in the industry. VITL outperforms 91.11% of its industry peers.

Analyzing Profitability Metrics

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. VITL was assigned a score of 9 for profitability:

• VITL has a Return On Assets of 14.86%. This is amongst the best in the industry. VITL outperforms 94.44% of its industry peers.
• VITL has a Return On Equity of 19.82%. This is amongst the best in the industry. VITL outperforms 88.89% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 17.93%, VITL belongs to the top of the industry, outperforming 96.67% of the companies in the same industry.
• The last Return On Invested Capital (17.93%) for VITL is above the 3 year average (10.84%), which is a sign of increasing profitability.
• Looking at the Profit Margin, with a value of 8.81%, VITL belongs to the top of the industry, outperforming 82.22% of the companies in the same industry.
• VITL's Profit Margin has improved in the last couple of years.
• VITL's Operating Margin of 10.48% is fine compared to the rest of the industry. VITL outperforms 75.56% of its industry peers.
• In the last couple of years the Operating Margin of VITL has grown nicely.
• The Gross Margin of VITL (37.92%) is better than 83.33% of its industry peers.
• In the last couple of years the Gross Margin of VITL has grown nicely.

How do we evaluate the setup for VITL?

ChartMill also assign a Setup Rating to every stock. With this score it is determined to what extend the stock has been trading in a range in the recent days and weeks. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. VITL scores a 7 out of 10:

VITL has only a medium technical rating, but it does show a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is a resistance zone just above the current price starting at 35.93. Right above this resistance zone may be a good entry point. We notice that large players showed an interest for VITL in the last couple of days, which is a good sign.

More Strong Growth stocks can be found in our Strong Growth screener.

Check the latest full fundamental report of VITL for a complete fundamental analysis.

Check the latest full technical report of VITL for a complete technical analysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.