Is Vital Farms, Inc. overvalued or undervalued?

As of 7 November 2025, the valuation grade for Vital Farms, Inc. has moved from very attractive to attractive, indicating a shift in market perception. The company appears to be overvalued, with a P/E ratio of 27, significantly higher than peers such as Pilgrim's Pride Corp. at 8.20 and Cal-Maine Foods, Inc. at 6.80. Additionally, the EV to EBITDA ratio stands at 15.41, which is also elevated compared to the industry averages.
In terms of performance metrics, Vital Farms boasts a robust ROCE of 44.59% and an ROE of 17.83%, but these figures do not fully justify its current valuation levels. The stock has shown mixed performance against the S&P 500, with a 1-year return of 10.52% compared to the index's 12.65%, and a significant decline of 20.88% over the past month, indicating potential volatility. Overall, the combination of high valuation ratios and recent stock performance suggests that Vital Farms, Inc. is overvalued in the current market context.