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Tandy Leather Factory (TLF)
NASDAQ:TLF
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Tandy Leather Factory
(NASDAQ:TLF)
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Rating:56Neutral
Price Target:
$3.00
▲(5.63% Upside)
Overall score is held back primarily by weakening core operations (declining revenue, negative operating income) and, most importantly, negative operating cash flow/free cash flow that conflicts with reported net income. Offsetting factors include a still-supportive balance sheet and a very low P/E, while technicals are only mildly improving and remain below longer-term trend levels.
Positive Factors
Strong Equity Position
A strong equity position indicates financial stability and resilience, providing a solid foundation for future growth and investment opportunities.
Low Leverage
Low leverage reduces financial risk and interest obligations, allowing more flexibility in capital allocation and strategic initiatives.
Stable Cash Flow
Stable operating cash flow ensures the company can meet its operational expenses and invest in growth without relying heavily on external financing.
Negative Factors
Decreasing Margins
Decreasing margins indicate reduced profitability, which can limit reinvestment in the business and affect long-term competitiveness.
Revenue Decline
A decline in revenue suggests potential market challenges and could impact the company's ability to grow and maintain its market position.
Reduced Free Cash Flow
Reduced free cash flow limits the company's ability to invest in new opportunities, pay down debt, or return capital to shareholders, potentially hindering growth.
Tandy Leather Factory (TLF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$22.99M
Dividend YieldN/A
Average Volume (3M)12.55K
Price to Earnings (P/E)2.2
Beta (1Y)0.35
Revenue Growth-0.28%
EPS Growth363.27%
CountryUS
Employees414
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)-0.17
Shares Outstanding8,067,502
10 Day Avg. Volume9,780
30 Day Avg. Volume12,547
Financial Highlights & Ratios
PEG Ratio-0.63
Price to Book (P/B)0.71
Price to Sales (P/S)0.55
P/FCF Ratio26.00
Enterprise Value/Market Cap0.92
Enterprise Value/Revenue0.28
Enterprise Value/Gross Profit0.50
Enterprise Value/Ebitda6.47
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Tandy Leather Factory Business Overview & Revenue Model
Company DescriptionTandy Leather Factory, Inc., together with its subsidiaries, operates as a retailer of leather and leathercraft-related items in North America and Spain. It offers leather, hand tools, hardware, kits, liquids, teaching materials, open workbenches, machinery, and related accessories and supplies. The company also manufactures leather laces, cut leather pieces, do-it-yourself kits, thread laces, belt strips and straps, and Craftaids. In addition, it offers production services, including cutting, splitting, and assembly services to business customers. The company sells its products under the Tandy Leather, Eco-Flo, Craftool, CraftoolPro, Dr. Jackson's, and TandyPro brand names through company-owned stores; and orders generated from its websites, such as tandyleather.com, tandyleather.ca, tandyleather.eu, and tandyleather.com.au. It operates 106 retail stores, including 95 stores in the United States; ten stores in Canada; and one store in Spain. The company was formerly known as The Leather Factory, Inc. and changed its name to Tandy Leather Factory, Inc. in 2005. Tandy Leather Factory, Inc. was founded in 1919 and is headquartered in Fort Worth, Texas.
How the Company Makes MoneyTandy Leather Factory generates revenue primarily through the sale of leather and leatherworking supplies, including hides, tools, dyes, and hardware, both in retail locations and online. The company has a diversified revenue model that includes direct sales to consumers, wholesale distribution to businesses, and educational workshops that promote leather crafting skills. Key revenue streams include in-store purchases, e-commerce sales, and bulk orders from commercial customers. TLF also benefits from partnerships with leathercraft influencers and educators, which help drive brand awareness and customer engagement, further contributing to its earnings.
Tandy Leather Factory Earnings Call Summary
Earnings Call Date:Mar 22, 2024
(Q4-2023)
| % Change Since: |
Next Earnings Date:Mar 27, 2026
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with significant improvements in operating income, adjusted EBITDA, and gross margin, coupled with strategic new store openings. However, these positives were offset by a decline in overall sales and lower-than-expected interest income. The company showed strong financial discipline and strategic planning, suggesting cautious optimism for future growth.Q4-2023 Updates
Positive Updates
Increase in Operating Income
Operating income rose to $4.4 million, marking a $3 million increase over the previous year.
Adjusted EBITDA Growth
Adjusted EBITDA reached $6.5 million, up $2.5 million from the previous year.
Improved Gross Margin
Gross margin improved by 130 basis points due to reductions in freight and warehouse overhead, resulting in a decline in operating expenses by 9.7%.
Strong Balance Sheet
Cash increased by over $4 million to $12.2 million, and the company continues to have no debt.
New Store Openings
Opened a new store in Queens, New York, with leases signed for two more stores in Margate, Florida, and Richmond, Virginia.
Positive Interest in Property Sale
Strong interest reported in the potential sale of the Fort Worth property, which could release excess cash.
Negative Updates
Decline in Sales
Sales decreased by 5.1% to $76.2 million, attributed to weak consumer demand and store closures.
Low Interest Income
Interest income on cash was low at about $90,000, despite an average cash balance close to $10 million.
Company Guidance
In the Tandy Leather Factory (TLF) Q4 2023 earnings call, the company provided guidance focused on maintaining profitability and cash flow amid a challenging market environment. For the year, TLF reported a 5.1% decline in sales totaling $76.2 million, yet achieved a $4.4 million operating income, up $3 million from the previous year. Gross margin improved by 130 basis points, while operating expenses dropped by 9.7%. Adjusted EBITDA rose to $6.5 million, a $2.5 million increase year-over-year. The company ended the year with $12.2 million in cash, a $4 million increase, and maintained a debt-free balance sheet. Looking to 2024, Tandy plans to open 3 to 5 new stores, leveraging a new retail model that focuses on a smaller footprint and expert customer service. Additionally, the company is exploring the sale of its Fort Worth property to potentially unlock more value and excess cash, which could be returned to shareholders.Tandy Leather Factory Financial Statement Overview
Summary
Tandy Leather Factory demonstrates moderate financial health with strong equity and low leverage. However, decreasing margins and revenue suggest challenges in profitability and growth, though cash flow remains relatively stable.Income Statement
Tandy Leather Factory shows moderate stability with a gross profit margin of 56.2% and a declining net profit margin to 1.1% in 2024, down from 4.9% in 2023. Revenue has decreased by 2.4% from 2023 to 2024, indicating potential market challenges. The EBIT margin has also dropped significantly from 5.8% to 0.8%, highlighting decreased operational efficiency.58
Neutral
Balance Sheet
The company's balance sheet is relatively strong with a debt-to-equity ratio of 0.19, indicating low leverage. The equity ratio is 76.3%, reflecting a strong equity position. ROE decreased from 6.7% in 2023 to 1.4% in 2024, showing reduced profitability on equity.67
Positive
Cash Flow
Operating cash flow remained stable from 2023 to 2024, but the free cash flow decreased by 60.5%, showing reduced efficiency in cash generation. The operating cash flow to net income ratio is 5.5, indicating strong cash conversion, while the free cash flow to net income ratio is 1.9, reflecting a decent level of cash available after investments.32
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 74.55M | 74.39M | 76.23M | 80.33M | 82.66M | 64.08M |
| Gross Profit | 42.30M | 41.80M | 45.16M | 46.50M | 47.00M | 36.06M |
| EBITDA | 3.28M | 5.36M | 9.04M | 2.83M | 4.66M | -274.00K |
| Net Income | 11.46M | 827.00K | 3.77M | 1.23M | 1.35M | -4.90M |
Balance Sheet | ||||||
| Total Assets | 84.54M | 74.92M | 72.14M | 68.58M | 73.08M | 76.38M |
| Cash, Cash Equivalents and Short-Term Investments | 12.02M | 13.27M | 12.16M | 7.97M | 10.15M | 10.33M |
| Total Debt | 24.98M | 10.77M | 9.43M | 10.37M | 11.66M | 13.26M |
| Total Liabilities | 31.16M | 17.77M | 15.79M | 17.12M | 21.58M | 24.18M |
| Stockholders Equity | 53.38M | 57.15M | 56.35M | 51.46M | 51.50M | 52.19M |
Cash Flow | ||||||
| Free Cash Flow | -8.28M | 1.56M | 3.96M | 519.00K | 2.71M | -13.84M |
| Operating Cash Flow | -1.02M | 4.55M | 4.54M | 1.15M | 3.72M | -12.53M |
| Investing Cash Flow | 17.64M | -2.98M | -576.00K | -625.00K | -1.00M | 6.26M |
| Financing Cash Flow | -14.21M | -1.00K | -26.00K | -2.17M | -2.78M | 416.00K |
Tandy Leather Factory Technical Analysis
Positive
2.84
Price Trends
2.75
Positive
2.90
Negative
3.00
Negative
Market Momentum
0.02
Negative
60.76
Neutral
48.26
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TLF, the sentiment is Positive. The current price of 2.84 is above the 20-day moving average (MA) of 2.72, above the 50-day MA of 2.75, and below the 200-day MA of 3.00, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 60.76 is Neutral, neither overbought nor oversold. The STOCH value of 48.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TLF.
Tandy Leather Factory Risk Analysis
Tandy Leather Factory disclosed 21 risk factors in its most recent earnings report. Tandy Leather Factory reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Tandy Leather Factory Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
56 Neutral | $22.99M | 2.15 | 20.64% | ― | -0.28% | 363.27% | |
48 Neutral | $42.14M | -358.82 | -0.38% | 25.20% | -5.07% | -115.50% | |
47 Neutral | $17.21M | -2.13 | -11.43% | ― | -12.53% | -3.24% | |
44 Neutral | $28.53M | -1.16 | ― | ― | -10.64% | 37.38% | |
38 Underperform | $6.28M | -0.37 | ― | ― | -35.95% | 26.08% |
* Consumer Cyclical Sector Average
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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.