J & J Snack Foods (JJSF) AI Stock Analysis

• Market Cap: $2.28B
• Dividend Yield: 2.59%
• Average Volume (3M): 146.81K
• Price to Earnings (P/E): 30.1
• Beta (1Y): 0.26
• Revenue Growth: 0.49%
• EPS Growth: -12.32%
• Country: US
• Employees: 5,000
• Sector: Consumer Defensive
• Sector Strength: 62
• Industry: Packaged Foods
• EPS (TTM): 0.35
• Shares Outstanding: 19,455,490
• 10 Day Avg. Volume: 138,971
• 30 Day Avg. Volume: 146,807
• PEG Ratio: -4.21
• Price to Book (P/B): 4.32
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 39.84
• Enterprise Value/Market Cap: 1.42
• Enterprise Value/Revenue: 0.51
• Enterprise Value/Gross Profit: 6.82
• Enterprise Value/Ebitda: 4.54
• 1Y Price Target: $137.00
• Price Target Upside: 17.07% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 58 Neutral
• Price Target: $121.00 ▲(3.40%Upside)

J & J Snack Foods' stock is currently under pressure due to challenging financial performance, highlighted by declining profitability margins and unfavorable technical indicators. The stock's valuation appears stretched, though the dividend yield offers some compensation. While the company is optimistic about future improvements, the current earnings call highlights significant headwinds, particularly in specific segments and due to input cost inflation.

Positive Factors

Box Office Growth

A stronger movie release slate and good performance of the Minecraft movie have increased management's confidence in box office growth, impacting segment sales positively.

Management Confidence

Management reaffirmed the positive fundamentals discussed on the company’s fiscal second-quarter conference call.

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.

Revenue Shortfall

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. manufactures, markets, and distributes nutritional snack foods and beverages to the food service and retail supermarket industries in the United States, Mexico, and Canada. It operates in three segments: Food Service, Retail Supermarkets, and Frozen Beverages. The company offers soft pretzels under the SUPERPRETZEL, PRETZEL FILLERS, PRETZELFILS, GOURMET TWISTS, MR. TWISTER, SOFT PRETZEL BITES, SOFTSTIX, SOFT PRETZEL BUNS, TEXAS TWIST, BAVARIAN BAKERY, SUPERPRETZEL BAVARIAN, NEW YORK PRETZEL, KIM & SCOTT'S GOURMET PRETZELS, SERIOUSLY TWISTED!, BRAUHAUS, AUNTIE ANNE'S, and LABRIOLA, as well as under the private labels. It also provides frozen novelty under the LUIGI'S, WHOLE FRUIT, PHILLY SWIRL, SOUR PATCH, ICEE, and MINUTE MAID brands; churros under the TIO PEPE'S and CALIFORNIA CHURROS brands; and handheld products under the SUPREME STUFFERS and SWEET STUFFERS brands. In addition, the company offers bakery products, including biscuits, fig and fruit bars, cookies, breads, rolls, crumbs, muffins, and donuts under the MRS. GOODCOOKIE, READI-BAKE, COUNTRY HOME, MARY B'S, DADDY RAY'S, and HILL & VALLEY brands, as well as under private labels; and frozen beverages under the ICEE, SLUSH PUPPIE, and PARROT ICE brands. Further, it provides funnel cakes under the FUNNEL CAKE FACTORY brand, as well as various other food products; and sells machines and machine parts to other food and beverage companies. The company sells its products through a network of food brokers, independent sales distributors, and direct sales force. It serves snack bars and food stand locations in chain, department and mass merchandising stores, malls and shopping centers, fast food and casual dining restaurants, stadiums and sports arenas, leisure and theme parks, convenience stores, movie theatres, warehouse club stores, schools, colleges and other institutions, and independent retailers. The company was incorporated in 1971 and is headquartered in Pennsauken, New Jersey.

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
	EBIT
102.22M	117.55M	109.52M	61.80M	71.22M	23.58M
	EBITDA
158.83M	191.37M	174.34M	119.03M	121.88M	74.58M
	Net Income Common Stockholders
75.91M	86.55M	78.91M	47.23M	55.61M	18.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
233.92M	73.39M	49.58M	39.19M	291.17M	246.96M
	Total Assets
1.09B	1.37B	1.28B	1.22B	1.12B	1.06B
	Total Debt
68.03M	160.50M	121.91M	111.56M	60.53M	61.58M
	Net Debt
-102.30M	87.11M	72.33M	76.38M	-222.67M	-134.23M
	Total Liabilities
250.51M	408.13M	365.72M	353.80M	276.56M	247.06M
	Stockholders Equity
842.52M	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: Neutral
• Last Price: 117.02
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JJSF, the sentiment is Neutral. The current price of 117.02 is above the 20-day moving average (MA) of 114.98, below the 50-day MA of 123.75, and below the 200-day MA of 145.85, indicating a neutral trend. The MACD of -1.84 indicates Negative momentum. The RSI at 48.26 is Neutral, neither overbought nor oversold. The STOCH value of 83.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	$3.43B	23.69	8.40%	―	11.47%	2.59%
NOMD	66 Neutral	$2.66B	11.44	8.59%	3.68%	-0.24%	26.74%
FLO	65 Neutral	$3.53B	15.54	16.34%	5.73%	-1.02%	81.53%
Sector *	65 Neutral	$8.88B	15.03	4.75%	203.74%	3.58%	-2.49%
UTZ	61 Neutral	$1.92B	42.42	3.93%	1.72%	-1.29%	―
JJSF	58 Neutral	$2.28B	30.06	8.20%	2.59%	0.49%	-12.32%
KLG	52 Neutral	$1.38B	24.84	17.70%	4.08%	-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.