What Happened?
Shares of egg and butter company Vital Farms (NASDAQ:VITL) jumped 6.2% in the morning session after S&P Dow Jones Indices announced the company would be added to the S&P SmallCap 600 index. The news meant that index funds and exchange-traded funds (ETFs) that track the S&P SmallCap 600 needed to buy shares of Vital Farms to mirror the index's composition. This anticipated demand from passive investors often causes a stock's price to increase. According to the announcement, Vital Farms was set to officially join the index before trading began on December 11. The company replaced Heidrick & Struggles International in the index.
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What Is The Market Telling Us
Vital Farms’s shares are very volatile and have had 21 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 1 month ago when the stock gained 14.2% on the news that the company reported strong third-quarter 2025 financial results that surpassed Wall Street's expectations and raised its full-year forecast. Vital Farms posted quarterly earnings of $0.36 per share, easily beating analysts' average estimate of $0.30 per share. This figure more than doubled the earnings of $0.16 per share from the same period in the previous year. Revenue for the quarter came in at $198.9 million, a 37.2% increase year-over-year, which also topped forecasts. Based on this strong performance, Vital Farms increased its financial outlook for the full year. The company now expects net revenue of around $775 million and adjusted EBITDA of around $115 million, signaling confidence in its continued growth.
Vital Farms is down 13.2% since the beginning of the year, and at $33.71 per share, it is trading 35.7% below its 52-week high of $52.41 from August 2025. Investors who bought $1,000 worth of Vital Farms’s shares 5 years ago would now be looking at an investment worth $1,314.
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