Tandy Leather Factory (TLF) AI Stock Analysis

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Tandy Leather Factory

(NASDAQ:TLF)

Rating:73Outperform

Price Target:

$3.50

▲(9.72%Upside)

The overall stock score for Tandy Leather Factory is driven by a strong valuation, suggesting potential undervaluation, and positive technical indicators showing upward momentum. However, moderate financial performance with declining margins and revenue presents potential risks regarding profitability and growth.

Tandy Leather Factory (TLF) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$27.45M

Dividend YieldN/A

Average Volume (3M)20.28K

Price to Earnings (P/E)2.1

Beta (1Y)0.25

Revenue Growth-1.32%

EPS Growth252.38%

CountryUS

Employees414

SectorConsumer Cyclical

Sector Strength59

IndustrySpecialty Retail

Share Statistics

EPS (TTM)1.48

Shares Outstanding8,499,536

10 Day Avg. Volume21,366

30 Day Avg. Volume20,284

Financial Highlights & Ratios

PEG Ratio-4.63

Price to Book (P/B)0.69

Price to Sales (P/S)0.00

P/FCF Ratio68.49

Enterprise Value/Market Cap1.81

Enterprise Value/Revenue0.17

Enterprise Value/Gross Profit1.20

Enterprise Value/Ebitda2.41

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

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 leathercraft supplies. Its key revenue streams include retail sales from its physical store locations and online e-commerce platform, as well as wholesale distribution to businesses and institutions. The company benefits from its strong brand recognition and customer loyalty in the niche market of leathercrafting. Partnerships with educational institutions and craft-focused organizations also contribute to its revenue by fostering long-term customer relationships and expanding its market reach.

Tandy Leather Factory Earnings Call Summary

Earnings Call Date:May 12, 2025

(Q4-2023)

% Change Since: 11.93%|

Next Earnings Date:Aug 19, 2025

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

Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
74.15M	74.39M	76.23M	80.33M	82.66M	64.08M
	Gross Profit
41.60M	41.80M	45.16M	46.50M	47.00M	36.06M
	EBIT
241.00K	628.00K	4.41M	1.39M	2.30M	-5.27M
	EBITDA
2.57M	5.36M	9.04M	5.82M	6.52M	-2.06M
	Net Income Common Stockholders
12.98M	827.00K	3.77M	1.23M	1.35M	-4.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
23.59M	13.27M	12.16M	7.97M	10.15M	10.33M
	Total Assets
77.92M	74.92M	72.14M	68.58M	73.08M	75.69M
	Total Debt
10.72M	10.77M	9.43M	10.37M	11.66M	13.26M
	Net Debt
-12.88M	-2.50M	-2.73M	2.39M	1.51M	2.94M
	Total Liabilities
21.03M	17.77M	15.79M	17.12M	21.58M	23.50M
	Stockholders Equity
56.89M	57.15M	56.35M	51.46M	51.50M	52.19M
Cash Flow		Free Cash Flow
-161.00K	1.56M	3.96M	519.00K	2.71M	-13.84M
	Operating Cash Flow
2.93M	4.55M	4.54M	1.15M	3.72M	-12.53M
	Investing Cash Flow
21.81M	-2.98M	-576.00K	-625.00K	-1.00M	6.26M
	Financing Cash Flow
-10.54M	-1.00K	-26.00K	-2.17M	-2.78M	416.00K

Tandy Leather Factory Technical Analysis

Technical Analysis Sentiment

Positive

Last Price3.19

Price Trends

50DMA

2.92

Positive

100DMA

3.12

Positive

200DMA

3.12

Positive

Market Momentum

MACD

0.08

Negative

RSI

58.84

Neutral

STOCH

39.09

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 3.19 is above the 20-day moving average (MA) of 3.04, above the 50-day MA of 2.92, and above the 200-day MA of 3.12, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 58.84 is Neutral, neither overbought nor oversold. The STOCH value of 39.09 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

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TLF	73 Outperform	$27.45M	2.11	22.74%	―	-1.32%	252.38%
Sector *	63 Neutral	$6.98B	11.41	2.80%	4.24%	2.68%	-24.94%
BGFV	52 Neutral	$29.48M	―	-39.57%	36.82%	-8.85%	-397.36%
NHTC	49 Neutral	$54.92M	108.16	1.44%	16.77%	-0.62%	1.15%
YJ	49 Neutral	$8.72M	―	-10.86%	―	-35.95%	26.08%
KIRK	46 Neutral	$28.08M	―	77.02%	―	-5.83%	18.04%
MOGU	40 Underperform	$15.53M	―	-8.25%	―	-32.31%	69.20%

* Consumer Cyclical Sector Average

Performance Comparison

TLF

Tandy Leather Factory

3.19

-0.01

-0.31%

BGFV

Big 5 Sporting Goods

1.25

-1.85

-59.68%

KIRK

Kirkland's

1.28

-0.62

-32.63%

NHTC

Natural Health Trends

4.65

-1.30

-21.85%

MOGU

Mogu

2.14

-0.31

-12.65%

Yunji

1.70

-1.26

-42.57%

Tandy Leather Factory Corporate Events

DividendsBusiness Operations and Strategy

Tandy Leather Factory Announces New Lease and Dividend

Positive

Jan 30, 2025

On January 28, 2025, Tandy Leather Factory entered into a commercial lease agreement for new corporate headquarters and a distribution center in Benbrook, Texas, expected to commence in July 2025. The company announced a special dividend and completed the sale of its current headquarters, planning to move operations by September 2025. These strategic moves aim to optimize operations and return value to shareholders, while maintaining its leadership in the leathercraft industry.

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.