Next-gen food company Vital Farms, Inc. (VITL  ) is disrupting the traditional food ecosystem and has "successfully differentiated its brand and products," especially in pasture-raised eggs, according to Telsey Advisory Group.

The Vital Farms Analyst: Analyst Sarang Vora initiates coverage of Vital Farms with an Outperform rating and price target of $52.

The Vital Farms Thesis: The demand for eggs is likely to continue rising due to their affordability and health benefits, Vora said in the initiation note.

Within this category, there is likely to be "outsized growth" in pasture-raised eggs, as consumers increasingly shift to "natural, healthy, and ethically sourced products," the analyst stated.

"Vital Farm's leadership in the pasture-raised egg category and its farm-to-table digital traceability should help," he added.

The company's sales are expected to grow at an annual growth rate of 19% to 20%, hitting the $1 billion mark in 2027, versus $600 million in 2024, Vora said. "Drivers of the growth include favorable industry trends and strategic initiatives, like higher household penetration, strong loyalty, expansion of SKUs and shelf-space at existing retail, and new account wins in retail and foodservice channels," he wrote.

VITL Price Action: Shares of Vital Farms had risen by 1.6% to $43.79 at the time of publication on Monday.