Vitafoam’s 300% surge in 2025: What ought to buyers do in 2026? 

Vitafoam Nigeria Plc was one of many standout client items shares that powered the sector’s spectacular efficiency in 2025.

The inventory delivered a 300% return, outperforming each the buyer items index and the NGX All-Share Index.

The rally adopted a muted exhibiting in 2024, when the inventory posted a modest year-to-date acquire of about 5%.

In early 2026, Vitafoam has prolonged its momentum, touching a brand new 52-week excessive of N97.80 yesterday, pushing its year-to-date acquire to six% and lifting market capitalization to about N122.3 billion.

This valuation is now greater than 3 times the corporate’s internet asset place as of September 30, 2025, highlighting the size of the re-rating buyers have priced in.

In opposition to this backdrop, a key query confronts buyers: ought to they lock within the 300% acquire, or keep invested to profit from the following part of returns?

Vitafoam has declared a money dividend of N3 per share for the 2025 monetary 12 months and proposed a bonus difficulty of 1 new share for each 5 held, with a qualification date of February 6, 2026, and money dividend cost scheduled for March 5, 2026.

Take revenue or maintain?  

To reply whether or not buyers ought to take revenue or keep invested, it helps to first perceive what sort of firm Vitafoam has been over time and why 2025 mattered a lot.

For a lot of the final decade, Vitafoam was a gradual however unspectacular client items inventory.

Revenues grew, however earnings weren’t too spectacular. In 2024, that weak point got here to a head.

• Regardless of a powerful 56% soar in income, earnings collapsed as overseas alternate losses ballooned to N12.7 billion, wiping out working positive aspects and compressing margins.
• The share value mirrored that actuality, barely transferring.

Then got here 2025, and the story modified.

The enterprise itself didn’t immediately reinvent the mattress market. As a substitute, earnings normalized.

• Income climbed to N111 billion, accounting for over 40% of Vitafoam’s complete income generated within the final 5 years mixed.
• Extra importantly, the corporate stopped bleeding from forex volatility. Overseas alternate losses fell sharply to simply N619 million from N12 billion in 2024, permitting working revenue to stream via to the underside line.
• Gross revenue margin held agency at 37%, exhibiting that profitability was not boosted by reducing corners or sacrificing pricing energy.
• Revenue attributable to shareholders surged to N13.5 billion, pushing earnings per share to N10.80, the best degree in at the very least 5 years.

Simply as importantly for extraordinary buyers, these earnings have been actual, they usually became money.

• Web money stream from working actions jumped to N15.2 billion, up from N3.3 billion a 12 months earlier.
• Retained earnings rose to N25.9 billion, giving the corporate robust steadiness sheet energy.

The 2025 300% rally seems to be pushed by a enterprise transferring from a muted monetary efficiency to monetary energy in a single 12 months.

However the query now isn’t whether or not the rally was justified; it was. The actual query is what comes subsequent.

On the present value, buyers are paying about N8.5 for each N1 of earnings, N3.7 for each N1 of e book worth, and simply over N1 for each N1 of income.

These multiples should not extreme for a corporation that has grown earnings at a 34% compound annual charge over the previous 5 years, has simply delivered spectacular earnings, and is now paying the next dividend backed by stronger money flows.

That stated, buyers needs to be sensible about what drove the 2025 surge. A big a part of the earnings rebound got here from the sharp discount in overseas alternate losses after an unusually weak 2024.

Whereas there may be little indication that the 2024 FX shock will repeat in 2026, future returns will rely on regular quantity progress, price self-discipline, and sustained money era, not one other dramatic earnings rebound.

So, ought to buyers take revenue? 

That depends upon whether or not you’re a short-term dealer or a long-term investor.

For brief-term merchants who purchased early and are sitting on triple-digit positive aspects, taking some cash off the desk is rational. Straightforward positive aspects have already been made.

For long-term buyers, nevertheless, the information helps holding the inventory, amassing the dividend, and permitting the enterprise to compound.

Vitafoam right now seems financially stronger, higher and extra cash-generative than it was two years in the past.