J & J Snack Foods (JJSF) AI Stock Analysis

• Market Cap: $2.32B
• Dividend Yield: 2.61%
• Average Volume (3M): 168.19K
• Price to Earnings (P/E): 30.7
• Beta (1Y): 0.25
• Revenue Growth: 0.49%
• EPS Growth: -12.32%
• Country: US
• Employees: 5,000
• Sector: Consumer Defensive
• Sector Strength: 56
• Industry: Packaged Foods
• EPS (TTM): 0.35
• Shares Outstanding: 19,455,490
• 10 Day Avg. Volume: 234,822
• 30 Day Avg. Volume: 168,192
• PEG Ratio: -3.59
• Price to Book (P/B): 3.03
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -42.72
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: 0.42
• Enterprise Value/Gross Profit: 5.69
• Enterprise Value/Ebitda: 3.79
• 1Y Price Target: $137.00
• Price Target Upside: 14.70% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 69 Neutral
• Price Target: $130.00 ▲(8.84%Upside)

J & J Snack Foods faces notable challenges including declining sales and margin pressures, which are reflected in the earnings call analysis. The company's high valuation and technical bearish signals further weigh on the stock score. However, solid financial stability and strategic initiatives in product innovation offer some positive outlook.

Positive Factors

Management Confidence

Management is confident in delivering 32% gross margins in 2HF25 due to high margin product lines becoming a pronounced percentage of revenue.

Product Launch

The most impactful new product launch of the year, Dippin’ Dots ice cream sundaes at retail, launched to strong customer acceptance in 1Q25.

Share Repurchase Program

JJSF announced a $50M 2-year share repurchase program, reflecting management's confidence in the company's current valuation and return potential for shareholders.

Negative Factors

Commodity Cost Inflation

Key commodities like flour, packaging, and chocolate are sources of inflationary pressure and could impact margins further.

Earnings Performance

Revenues of $226M were below consensus, impacting earnings and indicating weaker than expected performance.

Theatre Channel Weakness

The theatre channel weakness is a main driver of a $7M reduction in revenue estimates, contributing to expense deleverage and gross margin pressure.

J & J Snack Foods Business Overview & Revenue Model

Company Description

J & J Snack Foods Corp. (JJSF) is a leading manufacturer, marketer, and distributor of niche snack foods and beverages. Established in 1971, the company operates across several sectors, including food service, retail, and frozen beverages. Its core products include soft pretzels, frozen beverages, churros, and baked goods, which are sold under numerous brand names such as SuperPretzel, ICEE, Luigi's, and Tio Pepe's. J & J Snack Foods serves a diverse customer base, ranging from food service establishments and retail supermarkets to convenience stores and amusement parks.

How the Company Makes Money

J & J Snack Foods generates revenue through the manufacture and sale of its wide array of snack foods and beverages designed for both consumer and food service markets. The company's key revenue streams include the food service segment, where it provides products to restaurants, stadiums, schools, and other institutional clients, and the retail segment, which sells products directly to consumers through supermarkets and convenience stores. Additionally, the frozen beverage segment contributes significantly to its earnings, with ICEE and other branded frozen drinks being popular offerings. Strategic partnerships with large foodservice operators and retailers also play a crucial role in the company's distribution network, enhancing its market reach and contributing to sustained revenue growth.

J & J Snack Foods Financial Statement Overview

Summary

J & J Snack Foods demonstrates solid financial performance with consistent revenue growth and strong balance sheet stability. The company maintains healthy cash flow generation, although profitability margins have slightly declined. Continued attention to margin preservation and cash flow management will be crucial.

Income Statement

J & J Snack Foods has shown a consistent increase in total revenue over the years, with a revenue growth rate of approximately 1% in TTM (Trailing-Twelve-Months) compared to the previous year. The gross profit margin is solid at about 29.8% for TTM, indicating efficient cost management. However, the net profit margin has decreased from 5.5% in 2024 to 4.8% in TTM, highlighting a slight decline in profitability. EBIT and EBITDA margins have also seen a slight decrease, suggesting pressure on operating profitability.

Balance Sheet

The company maintains a healthy balance sheet with a low debt-to-equity ratio of 0.18 in TTM, indicating conservative leverage and financial stability. The equity ratio remains strong at around 68.9%, showcasing a robust asset base backed by equity. Return on equity (ROE) has decreased slightly to 8.1% in TTM from 9% in the previous year, reflecting a modest decline in profitability relative to equity.

Cash Flow

Cash flow from operations has remained relatively stable, supporting the company's liquidity position. The operating cash flow to net income ratio is strong at 2.1 in TTM, indicating effective cash generation relative to earnings. However, free cash flow has decreased by 16.2% in TTM due to increased capital expenditures, which could be a potential concern if it continues.

Breakdown	TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	1.59B	1.57B	1.56B	1.38B	1.14B	1.02B
Gross Profit	472.90M	486.13M	469.87M	369.64M	298.93M	238.43M
EBITDA	158.83M	191.37M	174.34M	119.03M	121.88M	74.58M
Net Income	75.91M	86.55M	78.91M	47.23M	55.61M	18.30M
Balance Sheet
Total Assets	1.36B	1.37B	1.28B	1.22B	1.12B	1.06B
Cash, Cash Equivalents and Short-Term Investments	48.51M	73.39M	49.58M	39.19M	291.17M	246.96M
Total Debt	168.22M	160.50M	121.91M	111.56M	60.53M	61.58M
Total Liabilities	422.56M	408.13M	365.72M	353.80M	276.56M	247.06M
Stockholders Equity	935.03M	956.97M	911.52M	863.17M	845.65M	809.50M
Cash Flow
Free Cash Flow	83.37M	99.50M	67.54M	-61.23M	47.92M	34.33M
Operating Cash Flow	158.84M	173.07M	172.28M	26.06M	101.50M	92.14M
Investing Cash Flow	-79.10M	-77.67M	-93.24M	-296.17M	9.94M	-44.46M
Financing Cash Flow	-68.94M	-68.37M	-66.84M	22.22M	-24.67M	-43.46M

J & J Snack Foods Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 119.44
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JJSF, the sentiment is Positive. The current price of 119.44 is above the 20-day moving average (MA) of 114.56, above the 50-day MA of 117.47, and below the 200-day MA of 141.16, indicating a neutral trend. The MACD of -0.16 indicates Negative momentum. The RSI at 57.88 is Neutral, neither overbought nor oversold. The STOCH value of 76.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JJSF.

J & J Snack Foods Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SMPL	76 Outperform	$3.24B	22.35	8.40%	―	11.47%	2.59%
JJSF	69 Neutral	$2.32B	30.68	8.20%	2.61%	0.49%	-12.32%
NOMD	66 Neutral	$2.66B	11.44	8.59%	3.92%	-0.24%	26.74%
Sector *	65 Neutral	$27.25B	15.35	-4.01%	3.14%	1.00%	1.98%
FLO	65 Neutral	$3.42B	15.09	16.34%	6.05%	-1.02%	81.53%
UTZ	59 Neutral	$1.86B	41.20	3.93%	1.85%	-1.29%	―
KLG	58 Neutral	$1.54B	27.78	17.70%	3.69%	-3.13%	-51.41%

J & J Snack Foods Corporate Events

J & J Snack Foods Launches New Deferred Compensation Plan

J & J Snack Foods Corp. introduces a new Non-Qualified Deferred Compensation Plan (DCP) for management, directors, and contractors, effective January 2025. Participants can defer portions of their salary, bonuses, and commissions into notional investments, with the option to choose payment in lump sums or installments after separation from service. While the DCP offers investment flexibility, it remains an unfunded and unsecured plan, ensuring participants are general creditors of the company.

J & J Snack Foods Appoints New CFO Shawn Munsell

J & J Snack Foods Corp. has appointed Shawn Munsell as the new Senior Vice President and Chief Financial Officer, effective December 2, 2024, following the retirement of Ken Plunk. With a robust financial background including leadership roles at Calavo Growers and Tyson Foods, Munsell will oversee the company’s financial operations. His compensation package includes a $500,000 base salary, a 75% target bonus, and a $50,000 sign-on bonus, alongside long-term incentives.