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BBB Foods, Inc. Class A (TBBB)
:TBBB
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BBB Foods, Inc. Class A
(NYSE:TBBB)
Rating:59Neutral
Price Target:
$27.00
▲(5.92% Upside)
Positive Factors
Revenue Growth
Projected revenues are expected to grow by an average of +27% per annum, resulting in significant net income growth of +77% across the same period.
Store Expansion
TBBB is quickly scaling its store base, with a sales area CAGR of +25%, reaching 2,889 locations, which should drive strong sales and EBITDA growth rates for several years.
Negative Factors
Share-Based Compensation
Detailed analysis of TBBB’s share-based compensation programs suggests approximately 40% potential dilution risk, which can create an overhang to near-term EPS growth.
Stock Valuation
Current valuation of 91x adjusted P/E implies a PEG of 5.1X, suggesting the stock may be overvalued.
BBB Foods, Inc. Class A (TBBB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$0.00
Dividend YieldN/A
Average Volume (3M)676.73K
Price to Earnings (P/E)101.2
Beta (1Y)0.00
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees25,300
SectorGeneral
Sector StrengthN/A
IndustryDiscount Stores
Share Statistics
EPS (TTM)N/A
Shares Outstanding0
10 Day Avg. Volume615,205
30 Day Avg. Volume676,726
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/Revenue0.00
Enterprise Value/Gross Profit0.00
Enterprise Value/Ebitda0.00
Forecast
1Y Price Target
$33.00Price Target Upside29.46% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
BBB Foods, Inc. Class A Business Overview & Revenue Model
Company DescriptionBBB Foods, Inc. Class A (TBBB) is a leading player in the food production and distribution sector, specializing in a diverse range of high-quality food products. The company operates across various segments, including packaged foods, frozen meals, and snacks, catering to both retail and food service markets. With a commitment to sustainability and innovation, BBB Foods, Inc. strives to meet consumer demands for healthy and convenient food options.
How the Company Makes MoneyThe company generates revenue through multiple streams, primarily by selling its diverse product lines to grocery chains, restaurants, and food distributors. Key revenue streams include direct product sales, distribution agreements, and private label partnerships. Additionally, BBB Foods, Inc. benefits from economies of scale in production and distribution, allowing for competitive pricing. Strategic partnerships with major retailers enhance its market reach and drive sales volume, while ongoing investment in marketing and product development helps to attract new customers and retain existing ones.
BBB Foods, Inc. Class A Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: -17.72%|
Next Earnings Date:Aug 20, 2025
Earnings Call Sentiment Neutral
The earnings call presents a strong growth narrative with significant store openings and revenue increases. However, these achievements are counterbalanced by rising administrative expenses and a decrease in EBITDA margin due to accelerated investments. The sentiment reflects a strategic focus on long-term growth despite short-term financial pressures.Q1-2025 Updates
Positive Updates
Record Store Openings and Growth
Opened 117 net new stores this quarter, bringing the total to 2,889 stores. Compared to the first quarter of 2024, which had 94 openings, this marks a significant increase and a total of 507 stores over the last 12 months.
Strong Revenue and Same Store Sales Growth
Total revenues increased by 35% to MXN17 billion, with same store sales growing by 13.5%. This positions Tiendas Tres B as one of the fastest-growing retailers globally.
Improved Cash Flow and Financial Position
Cash flow generated by operating activities reached MXN1.1 billion, a 49% increase year-over-year. The company ended with a net cash position of approximately MXN1.6 billion, plus $150 million of cash.
EBITDA Growth
EBITDA increased by over 12% to reach MXN705 million, despite margin pressures due to increased investments.
Negative Updates
Increased Admin Expenses
Admin expenses as a percentage of revenue increased by 60 basis points from 3.5% to 4.1%, partly due to MXN84 million in noncash share-based payments and investments in growth.
EBITDA Margin Decrease
EBITDA margin decreased from 4.9% to 4.1% due to increased investments to support growth.
Impact of Accelerated Store Openings on Expenses
Sales expenses as a percentage of revenue slightly increased from 10.2% to 10.3% due to the fast pace of store openings, which incurs costs before revenues fully materialize.
Company Guidance
In the first quarter of fiscal year 2025, Tiendas Tres B demonstrated significant growth and operational success despite challenging market conditions. The company opened 117 net new stores, increasing its total to 2,889, and reported a 13.5% growth in same-store sales. Total revenues increased by 35.1% year-over-year, reaching MXN17.1 billion, while EBITDA rose by 12.7% to MXN705 million. The company generated MXN1.1 billion in cash flow from operating activities, marking a 49% increase from the previous year, and ended the quarter with a net cash position of approximately MXN1.6 billion. Administrative expenses rose by 60 basis points to 4.1% of revenue, partly due to increased investments in talent and new regional expansions. Despite these expenses, the company maintained a robust business model with significant negative working capital, contributing to strong cash flow generation. The strategic focus remains on accelerating growth and expanding market share, supported by investments in technology and distribution infrastructure.BBB Foods, Inc. Class A Financial Statement Overview
Summary
BBB Foods, Inc. Class A shows a strong financial trajectory with significant revenue and profit growth, improved equity position, and robust cash flows. However, leverage remains a concern with a moderate debt-to-equity ratio, and operational efficiency improvements are needed.Income Statement
BBB Foods, Inc. Class A has shown strong revenue growth, with a 30.26% increase from 2023 to 2024. The company has successfully transitioned from a net loss in 2023 to a net profit in 2024, resulting in an improved net profit margin of 0.58%. Gross profit margins have held steady, indicating effective cost management. However, EBIT and EBITDA margins, while improved, remain modest at 2.31% and 6.07% respectively, suggesting room for operational efficiency improvements.85
Very Positive
Balance Sheet
The balance sheet reflects a significant improvement in stockholders' equity, shifting from negative in 2023 to positive in 2024. The debt-to-equity ratio stands at 2.28, indicating a moderate leverage level but improved equity position. The equity ratio has improved to 17.71%, though it remains below ideal levels, indicating a reliance on liabilities. Continued focus on reducing debt and improving equity is recommended.70
Positive
Cash Flow
Cash flows have been robust with a strong operating cash flow to net income ratio of 11.21, reflecting efficient cash generation from operations. Free cash flow remains strong, although it showed a slight decrease from 2023. The improvement from negative net income to positive supports the cash flow strength, but cautious cash management is advised to maintain this trajectory.78
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 61.89B | 57.44B | 44.08B | 32.58B | 23.09B |
| Gross Profit | 10.06B | 9.38B | 7.04B | 4.92B | 3.44B |
| EBITDA | 3.22B | 3.49B | 2.43B | 820.41M | 608.85M |
| Net Income | 478.31M | 334.42M | -306.15M | -565.11M | -816.67M |
Balance Sheet | |||||
| Total Assets | 23.97B | 22.78B | 14.96B | 11.79B | 8.05B |
| Cash, Cash Equivalents and Short-Term Investments | 4.63B | 4.47B | 1.22B | 984.63M | 1.00B |
| Total Debt | 9.73B | 9.20B | 11.91B | 10.55B | 8.13B |
| Total Liabilities | 19.81B | 18.74B | 19.60B | 16.51B | 12.50B |
| Stockholders Equity | 4.16B | 4.03B | -4.63B | -4.71B | -4.45B |
Cash Flow | |||||
| Free Cash Flow | 1.52B | 1.31B | 1.34B | 990.65M | 832.27M |
| Operating Cash Flow | 4.12B | 3.75B | 3.14B | 2.12B | 1.37B |
| Investing Cash Flow | -5.05B | -4.91B | -1.78B | -1.11B | -524.08M |
| Financing Cash Flow | -1.97B | 1.29B | -1.10B | -1.03B | -450.24M |
BBB Foods, Inc. Class A Technical Analysis
Negative
25.49
Price Trends
26.79
Negative
27.27
Negative
28.61
Negative
Market Momentum
-0.37
Negative
44.06
Neutral
48.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TBBB, the sentiment is Negative. The current price of 25.49 is below the 20-day moving average (MA) of 25.62, below the 50-day MA of 26.79, and below the 200-day MA of 28.61, indicating a bearish trend. The MACD of -0.37 indicates Negative momentum. The RSI at 44.06 is Neutral, neither overbought nor oversold. The STOCH value of 48.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TBBB.
BBB Foods, Inc. Class A Peers Comparison
Overall Rating
UnderperformOutperform
Sector (56)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $14.52B | 25.57 | 32.76% | ― | 2.84% | 11.25% | |
79 Outperform | $3.36B | 23.01 | 12.34% | 0.58% | 7.47% | 15.20% | |
78 Outperform | $8.47B | 42.45 | 12.32% | ― | 8.70% | 2.54% | |
77 Outperform | $23.88B | 20.70 | 15.69% | 2.13% | 4.77% | -23.73% | |
60 Neutral | $24.14B | ― | 19.25% | ― | -20.46% | -202.26% | |
59 Neutral | $0.00 | 101.19 | 14.10% | ― | ― | ― | |
56 Neutral | $6.40B | 15.34 | -29.56% | 6.36% | 11.10% | -33.12% |
* General Sector Average
Performance Comparison
TBBB
BBB Foods, Inc. Class A
24.71
-1.41
-5.40%
DG
Dollar General
110.86
-4.56
-3.95%
DLTR
Dollar Tree
115.66
20.63
21.71%
PSMT
Pricesmart
109.04
29.08
36.37%
OLLI
Ollie's Bargain Outlet Holding
138.42
47.79
52.73%
BJ
Bj's Wholesale Club Holdings
106.56
23.04
27.59%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.