Is Vital Farms, Inc. overvalued or undervalued?

As of 6 May 2025, the valuation grade for Vital Farms, Inc. has moved from very expensive to expensive, indicating a slight improvement in perceived value. The company is currently considered overvalued. Key ratios include a P/E ratio of 27, an EV to EBITDA of 15.41, and a PEG ratio of 1.09, which suggest that the stock is trading at a premium compared to its earnings growth potential.
In comparison to peers, Vital Farms has a higher P/E ratio of 29.69 compared to Fresh Del Monte Produce, Inc. at 10.64 and Mission Produce, Inc. at 19.97, further supporting the conclusion of overvaluation. Additionally, while the company has a strong ROCE of 44.59% and ROE of 17.83%, these metrics do not sufficiently justify its current price level when compared to industry standards. Notably, despite recent stock performance showing a 12.08% return over the past week, it has underperformed the S&P 500 over the year, which may indicate a disconnect between market sentiment and fundamental valuation.