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BBB Foods, Inc. Class A (TBBB)
:TBBB
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BBB Foods, Inc. Class A
(NYSE:TBBB)
66Neutral
Positive Factors
Financial Performance
TBBB swung to a profit from a prior-year loss, showcasing improved financial performance.
Growth Potential
Store openings are outpacing the plan, indicating strong growth potential for TBBB.
Revenue Growth
Revenue increased by 30% and adjusted EBITDA rose by 59%, driven by strong sales and operating leverage.
Negative Factors
Non-Recurring Expenses
TBBB incurred Ps140-165mn in non-recurring expenses, largely related to its IPO, compliance requirements and other obligations.
Stock Offering Impact
Shares are expected to trade off on news of the offering and some expense related concerns.
BBB Foods, Inc. Class A (TBBB) vs. S&P 500 (SPY)
Market Cap
$2.97B
Dividend YieldN/A
Average Volume (3M)790.99K
Price to Earnings (P/E)―
Beta (1Y)1.12
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees25,300
SectorGeneral
Sector StrengthN/A
IndustryDiscount Stores
Share Statistics
EPS (TTM)-0.03
Shares Outstanding62,048,107
10 Day Avg. Volume826,236
30 Day Avg. Volume790,992
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.77
Price to Cash Flow (P/CF)12.30
P/FCF Ratio15.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$36.00Price Target Upside36.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
BBB Foods, Inc. Class A Business Overview & Revenue Model
Company DescriptionBBB Foods Inc., through its subsidiaries, operates grocery retail stores in Mexico. It offers food products, drinks, hygiene and beauty products, home clean products, coffee, tea and substitutes, jellies and desserts, and baby and pet products. The company also provides branded, private label, and spot products. In addition, it offers its products through online. The company serves low-to-middle income households. The company was incorporated in 2004 and is headquartered in Mexico City, Mexico.
How the Company Makes MoneyBBB Foods, Inc. makes money primarily through the sale of its food products across various distribution channels, including supermarkets, convenience stores, and online platforms. The company's revenue streams are diversified across several product categories such as snacks, beverages, and meals, allowing it to tap into different consumer needs and preferences. Key partnerships with retailers and distributors enhance its market reach and sales potential. Additionally, BBB Foods, Inc. invests in marketing and brand development to drive customer loyalty and increase market share, contributing significantly to its earnings.
BBB Foods, Inc. Class A Financial Statement Overview
Summary
BBB Foods, Inc. shows promising revenue and cash flow growth, with a robust cash flow position and improved profit margins. However, significant concerns remain due to high leverage and negative equity, which pose financial risks despite the improvements.Income Statement
BBB Foods, Inc. has shown robust revenue growth with a significant increase from $32.58B in 2022 to $44.08B in 2023, marking a 35.32% growth rate. The gross profit margin improved to 15.97% in 2023 from 15.11% in 2022. However, the company remains unprofitable with a negative net profit margin of -0.69%, though this is an improvement from the previous year's -1.73%. The EBIT margin also saw improvement, moving to 1.80% in 2023 from 1.60% in 2022, and the EBITDA margin is healthy at 5.52%.78
Positive
Balance Sheet
The balance sheet presents concerns with negative stockholders' equity at -$4.63B, indicating potential financial instability. The debt-to-equity ratio is not meaningful due to negative equity, but the high total debt of $11.91B suggests significant leverage. ROE is not applicable due to negative equity, and equity ratio is negative, reflecting financial risk.40
Negative
Cash Flow
BBB Foods, Inc. demonstrates strong cash flow management with a free cash flow growth rate of 35.28% from 2022 to 2023. The operating cash flow to net income ratio is significant, indicating strong cash generation relative to net income losses. The free cash flow to net income ratio is positive, showcasing efficiency in converting income to cash.85
Very Positive
| Breakdown | |||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|
| Income Statement | Total Revenue | ||
| 53.41B | 44.08B | 32.58B | 23.09B | Gross Profit |
| 8.69B | 7.04B | 4.92B | 3.44B | EBIT |
| 1.28B | 793.86M | 520.27M | 394.05M | EBITDA |
| 2.62B | 2.43B | 820.41M | 608.85M | Net Income Common Stockholders |
| 261.01M | -306.15M | -565.11M | -816.67M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||
| 984.63M | 1.22B | 984.63M | 1.00B | Total Assets |
| 11.79B | 14.96B | 11.79B | 8.05B | Total Debt |
| 10.55B | 11.91B | 10.55B | 8.13B | Net Debt |
| 9.57B | 10.71B | 9.57B | 7.13B | Total Liabilities |
| 16.51B | 19.60B | 16.51B | 12.50B | Stockholders Equity |
| -4.71B | -4.63B | -4.71B | -4.45B |
| Cash Flow | Free Cash Flow | ||
| 1.06B | 1.34B | 990.65M | 832.27M | Operating Cash Flow |
| 3.55B | 3.14B | 2.12B | 1.37B | Investing Cash Flow |
| -5.05B | -1.78B | -1.11B | -524.08M | Financing Cash Flow |
| 1.70B | -1.10B | -1.03B | -450.24M |
BBB Foods, Inc. Class A Technical Analysis
Neutral
26.43
Price Trends
26.85
Negative
28.50
Negative
28.80
Negative
Market Momentum
-0.04
Negative
54.24
Neutral
78.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TBBB, the sentiment is Neutral. The current price of 26.43 is above the 20-day moving average (MA) of 25.94, below the 50-day MA of 26.85, and below the 200-day MA of 28.80, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 54.24 is Neutral, neither overbought nor oversold. The STOCH value of 78.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TBBB.
BBB Foods, Inc. Class A Peers Comparison
Overall Rating
UnderperformOutperform
Sector (54)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $6.62B | 32.01 | 12.47% | ― | 8.04% | 10.75% | |
75 Outperform | $14.89B | 28.27 | 32.33% | ― | 2.67% | 2.72% | |
70 Outperform | $2.57B | 18.42 | 12.42% | 1.47% | 8.65% | 17.76% | |
66 Neutral | $2.97B | ― | 6.61% | ― | ― | ― | |
65 Neutral | $18.92B | 16.82 | 15.89% | 2.69% | 4.96% | -32.41% | |
61 Neutral | $15.61B | ― | 18.88% | ― | -9.88% | -205.57% | |
54 Neutral | $4.01B | -18.30 | -14.99% | 6.62% | 25.52% | -80.16% |
* General Sector Average
Performance Comparison
TBBB
BBB Foods, Inc. Class A
26.43
5.93
28.93%
DG
Dollar General
86.02
-65.39
-43.19%
DLTR
Dollar Tree
72.57
-57.68
-44.28%
PSMT
Pricesmart
85.79
7.83
10.04%
OLLI
Ollie's Bargain Outlet Holding
110.03
36.91
50.48%
BJ
Bj's Wholesale Club Holdings
113.10
34.66
44.19%
BBB Foods, Inc. Class A Earnings Call Summary
Earnings Call Date: Apr 9, 2025 | % Change Since: 0.00% | Next Earnings Date: May 21, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance by Tiendas 3B, marked by substantial store expansions, revenue, and EBITDA growth. While the company maintained a flat gross profit margin, it achieved significant operational efficiencies and cash generation, indicating a positive trajectory.Highlights
Strong Store Expansion
Opened 131 net new stores in Q3, totaling 2,634 stores as of September 30, with a 42% increase in store openings year-over-year.
Significant Revenue Growth
Total revenues increased by 29.8% year-on-year to reach MXN 14.8 billion, driven by an 11.6% increase in same-store sales.
Robust EBITDA Growth
EBITDA increased by 54% from MXN 447 million to MXN 688 million, reflecting strong sales growth and operational efficiency.
Improved Financial Metrics
SG&A as a percentage of total revenue decreased by 51 basis points from 13.9% to 13.4%, indicating cost optimization efforts.
Consistent Cash Generation
Net cash flows from operating activities reached MXN 2.3 billion, a 22.4% increase year-on-year, with a net cash position of MXN 1.3 billion.
Lowlights
Flat Gross Profit Margin
Gross profit margins remained flat at 15.8% compared to the same quarter last year, due to efficiencies being passed to consumers.
Company Guidance
During Tiendas 3B's Q3 2024 earnings call, the executives provided guidance on several key metrics reflecting the company’s strong performance and growth trajectory. The company opened 131 net new stores in the third quarter, totaling 2,634 stores as of September 30, 2024, and is on track to meet their annual target of 380 to 420 new store openings. Same-store sales increased by 11.6% year-on-year, contributing to a 29.8% rise in total revenues, reaching MXN 14.8 billion. The EBITDA for the quarter was MXN 688 million, a 54% year-on-year increase, while net cash flows from operating activities rose by 22.4% to approximately MXN 2.3 billion for the first nine months. The company ended the quarter with a net cash position of MXN 1.3 billion and an additional MXN 2.9 billion in short-term U.S. bank-denominated positions, maintaining a stable total cash position in U.S. dollar terms compared to the previous year. Despite a 42% increase in store openings compared to the same period last year, the company continues to be self-funded. The executives emphasized their commitment to efficient expense management, noting a decrease in SG&A as a percentage of revenue by 51 basis points year-over-year, from 13.9% to 13.4%. The gross profit margins remained flat at 15.8% compared to the same quarter last year, as efficiencies from scaling were passed on to customers through pricing.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.