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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.
Market Strategy
The analyst raises the price objective to $40, reflecting confidence in better operating leverage and a faster pace of store openings.
Negative Factors
Financial Challenges
Tiendas 3B reported an unexpected net loss of Ps23.6mn on Ps70mn in non-recurring pre-tax charges, higher expenses, and taxes.
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
$3.39B
Dividend YieldN/A
Average Volume (3M)712.49K
Price to Earnings (P/E)―
Beta (1Y)1.28
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. Volume658,361
30 Day Avg. Volume712,488
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
$37.33Price Target Upside23.65% Upside
Rating ConsensusStrong 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 | ||
| Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|
| Income Statement | Total Revenue | |
| 44.08B | 32.58B | 23.09B | Gross Profit |
| 7.04B | 4.92B | 3.44B | EBIT |
| 793.86M | 520.27M | 394.05M | EBITDA |
| 2.43B | 820.41M | 608.85M | Net Income Common Stockholders |
| -306.15M | -565.11M | -816.67M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |
| 1.22B | 984.63M | 1.00B | Total Assets |
| 14.96B | 11.79B | 8.05B | Total Debt |
| 11.91B | 10.55B | 8.13B | Net Debt |
| 10.71B | 9.57B | 7.13B | Total Liabilities |
| 19.60B | 16.51B | 12.50B | Stockholders Equity |
| -4.63B | -4.71B | -4.45B |
| Cash Flow | Free Cash Flow | |
| 1.34B | 990.65M | 832.27M | Operating Cash Flow |
| 3.14B | 2.12B | 1.37B | Investing Cash Flow |
| -1.78B | -1.11B | -524.08M | Financing Cash Flow |
| -1.10B | -1.03B | -450.24M |
BBB Foods, Inc. Class A Technical Analysis
Positive
30.19
Price Trends
26.54
Positive
27.99
Positive
29.02
Positive
Market Momentum
0.72
Negative
68.30
Neutral
97.15
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TBBB, the sentiment is Positive. The current price of 30.19 is above the 20-day moving average (MA) of 27.03, above the 50-day MA of 26.54, and above the 200-day MA of 29.02, indicating a bullish trend. The MACD of 0.72 indicates Negative momentum. The RSI at 68.30 is Neutral, neither overbought nor oversold. The STOCH value of 97.15 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TBBB.
BBB Foods, Inc. Class A Peers Comparison
Overall Rating
UnderperformOutperform
Sector (55)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $2.82B | 19.56 | 12.42% | 1.21% | 8.65% | 17.76% | |
76 Outperform | $6.57B | 33.19 | 12.47% | ― | 8.04% | 10.75% | |
75 Outperform | $14.75B | 27.99 | 32.33% | ― | 2.67% | 2.72% | |
66 Neutral | $3.39B | ― | 6.61% | ― | ― | ― | |
65 Neutral | $20.58B | 18.34 | 15.89% | 2.52% | 4.96% | -32.41% | |
61 Neutral | $17.33B | ― | 18.88% | ― | -9.88% | -205.57% | |
55 Neutral | $4.17B | -1.48 | -15.12% | 5.19% | 17.18% | -44.52% |
* General Sector Average
Performance Comparison
TBBB
BBB Foods, Inc. Class A
30.19
6.99
30.13%
DG
Dollar General
93.56
-44.88
-32.42%
DLTR
Dollar Tree
80.57
-38.24
-32.19%
PSMT
Pricesmart
99.98
19.15
23.69%
OLLI
Ollie's Bargain Outlet Holding
107.31
35.40
49.23%
BJ
Bj's Wholesale Club Holdings
111.99
36.46
48.27%
BBB Foods, Inc. Class A Earnings Call Summary
Earnings Call Date:Apr 09, 2025
(Q4-2024)
| % Change Since: 14.23%|
Next Earnings Date:May 21, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance by Tiendas Tres B, with significant revenue growth, store expansion, and increased private label penetration. Despite some increases in SG&A expenses, the overall financial position remains robust. The company's resilience in uncertain economic times and continuous operational improvements contribute to a positive outlook for 2025.Q4-2024 Updates
Positive Updates
Strong Store Expansion
Tiendas Tres B opened 138 net new stores in the fourth quarter and a total of 484 new stores for the full year, representing a 21% increase over 2023.
Robust Revenue Growth
Total revenues for the fourth quarter increased by 32.7% to MXN16.3 billion, and full year revenues increased by 30.3% to MXN57.4 billion.
Impressive Same Store Sales Growth
Same store sales growth for the fourth quarter was 11.8% and 13.4% for the full year, outperforming ANTAD's numbers significantly.
Strong Cash Flow and Financial Position
Net cash flows generated by operating activities reached MXN3.749 million, a 19.4% increase year-over-year, ending the year with a net cash position of approximately MXN1.4 billion.
Increased Private Label Penetration
Private labels now represent 54% of sales, up from 47% in 2023, driving increased value and customer loyalty.
Negative Updates
Increased SG&A Expenses
SG&A expenses as a percentage of revenue increased by 96 basis points to 15.2% in Q4 2024, including non-recurring expenses related to legal matters and public company preparations.
Company Guidance
In the Tiendas Tres B fourth quarter and full year 2024 conference call, the company provided guidance for 2025, forecasting same-store sales growth between 11% and 14% and total revenue growth ranging from 26% to 29%. The company plans to open between 500 and 550 new stores. In 2024, Tiendas Tres B achieved significant growth, with total revenues increasing by 30.3% to MXN57.4 billion and same-store sales rising by 13.4% for the full year. EBITDA for the year reached MXN2.8 billion, representing a 5% margin and a 51% growth compared to 2023. The company ended the year with a net cash position of approximately MXN1.4 billion and maintained USD150 million from its IPO. Despite economic uncertainty, Tiendas Tres B remains confident in its strong value proposition and operational resilience.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.