What Happened:

Shares of egg and butter company Vital Farms (NASDAQ:VITL) jumped 27.2% in the morning session after the company reported a "beat and raise" quarter. Vital Farms blew past analysts' revenue and EPS expectations. It raised its full-year guidance, showing that things are going better for the company than just three months ago when it previously gave financial guidance. Zooming out, we think this was a fantastic quarter that should have shareholders cheering.

Is now the time to buy Vital Farms? Access our full analysis report here, it's free.

What is the market telling us:

Vital Farms's shares are not very volatile than the market average and over the last year have had only 13 moves greater than 5%. Moves this big are very rare for Vital Farms and that is indicating to us that this news had a significant impact on the market's perception of the business. 

The biggest move we wrote about over the last year was 2 months ago, when the stock gained 13.2% on the news that the company reported fourth quarter results that blew past analysts' operating margin and EPS expectations. Its revenue also beat, driven by volume growth of 11.6% - this type of unit growth is rare in the consumer staples industry. Topping off the strong quarter was encouraging guidance, as management's revenue and EBITDA outlook of $552 million and $57 million cleared Wall Street's projections. The company's long-term goal is to hit $1 billion in net revenue by 2027 with a 35% gross margin and 12-14% adjusted EBITDA margin. Zooming out, this was a great quarter that shareholders will appreciate.

Vital Farms is up 139% since the beginning of the year. Investors who bought $1,000 worth of Vital Farms's shares at the IPO in July 2020 would now be looking at an investment worth $1,045.

Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.