Cal-Maine Foods (CALM) is back in focus after reporting 18.5% annual revenue growth over the last three years and 34.7% annual earnings per share growth, supported by share buybacks and strong free cash flow.

The recent earnings update comes as Cal-Maine Foods’ share price shows mixed momentum, with a 1-day share price return of 2.32% and 7-day share price return of 5.70%, but a 1-year total shareholder return of 17.77% decline and a 5-year total shareholder return of 175.62%. This suggests long term holders have still seen strong gains even as shorter term sentiment has cooled.

If this earnings story has you rethinking the egg producers in your portfolio, it could be a good moment to look beyond food and check out fast growing stocks with high insider ownership.

With earnings, strong free cash flow, and a recent share price pullback in the mix, the real question is whether Cal-Maine Foods is now trading below its fair value or if the market is already pricing in future growth.

Most Popular Narrative: 16% Undervalued

Cal-Maine Foods' most followed narrative sees fair value at $98 compared with the last close of $82.37, which sets up a clear valuation gap to unpack.

Expanding specialty egg and prepared foods offerings, including high growth cage free, pasture raised and ready to eat formats, is expected to lift average selling prices and shift the mix toward higher margin revenue streams, supporting net margin expansion and earnings growth.

Want to understand why a lower future profit base still supports a higher valuation? The narrative leans on margin reset, mix shift and a very punchy earnings multiple. Curious which assumptions really carry that $98 fair value? The full narrative breaks down those numbers step by step.

Result: Fair Value of $98 (UNDERVALUED)

However, it is worth keeping in mind that avian influenza disruptions or weaker demand for higher priced specialty and prepared egg products could challenge this upbeat valuation story.

Build Your Own Cal-Maine Foods Narrative

If you see the numbers differently or prefer to build your own view from the ground up, you can test your assumptions and Do it your way in just a few minutes.

A great starting point for your Cal-Maine Foods research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.