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Turning Point Brands (TPB)
NYSE:TPB
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Turning Point Brands
(NYSE:TPB)
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Rating:59Neutral
Price Target:
$102.00
▲(10.39% Upside)
Action:ReiteratedDate:03/05/26
The score is supported primarily by improving financial strength (notable deleveraging and solid profitability) and a positive earnings-call outlook driven by rapid Modern Oral growth and defined guidance. This is meaningfully offset by very weak technicals (price below all major moving averages with bearish momentum) and a relatively expensive P/E with only a modest dividend yield.
Positive Factors
Modern Oral Category Momentum
Sustained, rapid Modern Oral adoption shifts revenue mix toward a high-growth product category. Becoming a third of sales in a year supports durable top-line expansion, scale benefits in distribution and marketing, and creates a new structural revenue base less reliant on legacy segments.
High Gross Margins
Consistently robust gross margins indicate strong pricing power and product economics that support sustainable profitability. Even with mix shifts, margins near the mid-50s provide a durable buffer to absorb investments, taxes, and cost pressures over the medium term.
Deleveraging and Liquidity
Material deleveraging and a stronger equity base improve solvency and financial flexibility. Higher liquidity and lower leverage reduce refinancing and covenant risk, enabling continued investment behind Modern Oral growth and potential opportunistic capital allocation for 2–6 month strategic moves.
Negative Factors
Weakened Cash Conversion
A drop in cash conversion signals heavier working-capital needs or timing effects that can strain cash generation. If persistent, this reduces free cash available for debt paydown, marketing or manufacturing build-out, increasing execution risk during a growth phase.
Front‑Loaded SG&A and Lumpy Investment
Deliberate, front-loaded marketing and sales hires improve long-term growth potential but compress near-term operating leverage. Lumpy spending creates quarter-to-quarter EBITDA volatility and reduces short-term visibility into margins, complicating operational planning and cash forecasting.
Mix & Tariff Margin Pressure
Shifting revenue mix toward Modern Oral and elevated tariffs have created margin squeeze in legacy segments. Structural mix shifts plus external tariff pressures can delay margin expansion from domestic manufacturing and require sustained pricing or cost actions to restore prior EBITDA margins.
Turning Point Brands (TPB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.77B
Dividend Yield0.28%
Average Volume (3M)309.16K
Price to Earnings (P/E)34.1
Beta (1Y)0.53
Revenue Growth6.71%
EPS Growth8.16%
CountryUS
Employees310
SectorConsumer Defensive
Sector Strength42
IndustryTobacco
Share Statistics
EPS (TTM)0.42
Shares Outstanding19,141,209
10 Day Avg. Volume442,409
30 Day Avg. Volume309,158
Financial Highlights & Ratios
PEG Ratio0.81
Price to Book (P/B)5.60
Price to Sales (P/S)4.29
P/FCF Ratio45.28
Enterprise Value/Market Cap1.05
Enterprise Value/Revenue3.99
Enterprise Value/Gross Profit6.99
Enterprise Value/Ebitda16.08
Forecast
1Y Price Target
$130.00Price Target Upside40.69% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)4.02
Revenue Forecast (FY)$514.02M
Turning Point Brands Business Overview & Revenue Model
Company DescriptionTurning Point Brands, Inc., together with its subsidiaries, manufactures, markets, and distributes branded consumer products. The company operates through three segments: Zig-Zag Products, Stoker's Products, and NewGen Products. The Zig-Zag Products segment markets and distributes rolling papers, tubes, finished cigars, make-your-own cigar wraps, and related products under the Zig-Zag brand. The Stoker's Products segment manufactures and markets moist snuff tobacco and loose-leaf chewing tobacco products under the Stoker's, Beech-Nut, Durango, Trophy, and Wind River brands. The NewGen Products segment markets and distributes cannabidiol isolate, liquid vapor products, and other products without tobacco and/or nicotine to individual consumers through VaporFi B2C online platform, as well as non-traditional retail through VaporBeast. It sells its products to wholesale distributors and retail merchants in the independent and chain convenience stores, tobacco outlets, food stores, mass merchandising, and drug stores. The company was formerly known as North Atlantic Holding Company, Inc. and changed its name to Turning Point Brands, Inc. in November 2015. Turning Point Brands, Inc. was founded in 1988 and is headquartered in Louisville, Kentucky.
How the Company Makes MoneyTurning Point Brands generates revenue through multiple key streams. The primary revenue comes from the sale of smokeless tobacco products, which includes brands like Stoker's and Zig-Zag, known for their cigars and rolling papers. Additionally, TPB earns income from its vaping products and accessories, capitalizing on the growing trend of electronic nicotine delivery systems. The company has also expanded its revenue through the sale of hemp and CBD products, tapping into the burgeoning cannabis market. Strategic partnerships with distributors and retailers enhance TPB's market presence, allowing for broader product accessibility. Furthermore, the company benefits from brand loyalty among consumers, which contributes to repeat purchases and stable revenue growth.
Turning Point Brands Earnings Call Summary
Earnings Call Date:Mar 02, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call conveyed strong commercial momentum driven by rapid Modern Oral (white pouch) growth, meaningful revenue and adjusted EBITDA gains, healthy cash on hand, and clear FY2026 guidance for Modern Oral. Management signaled successful execution on distribution, sales force expansion, and near-term U.S. manufacturing qualification. Offsetting items include elevated SG&A from front-loaded promotional and marketing investments, a decline in Zig-Zag revenue (as expected), tariff-related margin pressure in the quarter, and some short-term uncertainty from lumpy investments and ongoing PMTA and tax-related costs. On balance, the positive operational and financial progress — particularly the outsized growth in Modern Oral and conservative financial position — outweighs the near-term margin pressures and investment-driven uncertainties.Q4-2025 Updates
Positive Updates
Quarterly Revenue Growth
Consolidated revenue increased 29% year-over-year to $121.0 million in Q4 2025, driven primarily by Modern Oral growth ($41.3 million net revenue).
Adjusted EBITDA Improvement
Adjusted EBITDA rose 14% year-over-year to $30.0 million in the quarter, representing a 24.8% adjusted EBITDA margin.
Rapid Modern Oral (White Pouch) Expansion
Net white pouch sales increased 266% year-over-year (gross sales +337%); Modern Oral now represents 34% of consolidated net sales, up from 12% a year ago.
Stoker's Segment Strength
Stoker's segment net sales increased 70% year-over-year to $81.0 million; legacy Stoker's brands grew 9% to $39.7 million, and the segment now accounts for 67% of consolidated net sales.
Strong Balance Sheet and Cash Generation
Ended the quarter with $222.8 million of cash and generated $19.2 million of free cash flow in Q4; quarterly CapEx was $3.3 million.
2016 (FY2026) Modern Oral Guidance Introduced
Company initiated FY2026 Modern Oral guidance: gross sales $220 million to $240 million and net sales $180 million to $190 million; Q1 2026 adjusted EBITDA guide $24 million to $27 million.
Execution on Go-to-Market and Distribution
ALP (initially D2C) is entering bricks-and-mortar ahead of schedule with planned Q2 expansion; FRE distribution is expanding in large chains and independents; sales force expansion is ahead of schedule (goal to double sales force).
Manufacturing Progress
U.S. manufacturing build-out is progressing with initial production lines expected to be qualified at the new factory in coming months, expected to reduce future supply constraints and improve margins over time.
Negative Updates
Higher SG&A and Investment-Driven Expense
Reported SG&A was $47.7 million in Q4, up $3.1 million sequentially due to planned sales & marketing investments behind Modern Oral and increased outbound freight charges, pressuring near-term operating leverage.
Zig-Zag Revenue Decline
Zig-Zag revenue declined 13% year-over-year to $40.0 million (also down 9% sequentially); management indicated this decline was expected as focus shifted to Modern Oral.
Flat Consolidated Gross Margin and Negative Mix Pressures
Consolidated gross margin was flat year-over-year at 55.9% despite sales growth; management cited negative mix effects in the Stoker's segment related to the rising share of Modern Oral and an elevated tariff rate that pressured Stoker's gross margins in Q4.
Lumpy, Front-Loaded Investment Outlook Creates Uncertainty
Company expects sales and marketing investments to be 'front-loaded' and lumpy through 2026 (including contra revenue for promotional spending), making EBITDA visibility beyond Q1 uncertain and potentially compressing near-term margins.
Domestic Manufacturing Ramp Timing and Mixed Supply
U.S. production lines are being qualified but the company will continue to rely on its Indian partner during ramp; margin benefits from onshore production are expected only later in the year as inventory and efficiencies work through the P&L.
Regulatory/Tax and Compliance Costs
Management highlighted ongoing PMTA-related spending ($3 million to $5 million expected for Modern Oral in 2026) and noted that state-level tax increases are likely over time, which could increase category pricing pressure (though taxes would be industry-wide).
Company Guidance
Management initiated 2026 Modern Oral guidance at gross sales of $220–240 million and net sales of $180–190 million, and expects Q1 2026 consolidated adjusted EBITDA of $24–27 million (inclusive of increased white pouch sales and marketing investments); modeling assumptions include an effective tax rate of 23%–26%, a 2026 CapEx budget of $4–5 million (exclusive of Modern Oral projects) and an additional $3–5 million planned to support Modern Oral PMTAs. For context, Q4 revenue was $121.0 million (up 29% YoY) including Modern Oral net revenue of $41.3 million, Q4 adjusted EBITDA was $30.0 million (24.8% margin), gross margin was 55.9%, SG&A was $47.7 million, quarter-end cash was $222.8 million, Q4 free cash flow was $19.2 million, and Modern Oral net sales grew 266% YoY (gross sales +337%) and now represent 34% of consolidated net sales (vs. 12% a year ago).Turning Point Brands Financial Statement Overview
Summary
Fundamentals are solid: revenue growth has re-accelerated and gross margins remain strong (~55–57%). Balance-sheet risk has improved meaningfully with major deleveraging (debt-to-equity down to ~0.82x in 2025). Offsetting items are weaker 2025 cash conversion (OCF and FCF below net income at ~0.76x) and some EBITDA margin compression versus 2023–2024.Income Statement
Revenue growth has re-accelerated, with 2025 up ~6.3% following a strong 2024 and modest 2023, indicating improving top-line momentum after the 2022 decline. Profitability is solid, supported by consistently strong gross margins (~55–57%) and a healthy 2025 net margin (~12.6%) versus the much weaker 2022 net margin (~3.6%). A key watch item is that EBITDA margin eased in 2025 (~20.6%) versus 2023–2024 levels (~26–27%), suggesting some near-term cost or mix pressure despite higher revenue and earnings.74
Positive
Balance Sheet
Leverage has improved materially over time: debt relative to equity declined from very elevated levels in 2021–2022 (>3x) to ~2.5x in 2023, ~1.39x in 2024, and ~0.82x in 2025, reflecting a healthier capital structure. Equity has also expanded significantly by 2025, improving balance-sheet resilience. That said, total debt remains sizable (~$304M in 2025), and returns on equity, while still solid (~15.6% in 2025), are lower than the unusually high levels posted in 2020–2024, implying normalization as the balance sheet delevers.70
Positive
Cash Flow
Free cash flow is positive across all periods and grew strongly in 2025 (~12.5%), which is supportive for debt reduction and shareholder returns. However, cash conversion weakened in 2025: operating cash flow was below net income (coverage ~0.76) and free cash flow was also below net income (~0.76), a step down from 2024 when operating cash flow covered net income more comfortably (~1.50) and free cash flow tracked net income more closely (~0.93). This suggests higher working-capital needs or less favorable timing effects in 2025 that are worth monitoring if they persist.68
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 463.06M | 360.66M | 325.06M | 321.23M | 445.47M |
| Gross Profit | 264.31M | 201.56M | 182.94M | 177.83M | 217.83M |
| EBITDA | 108.03M | 94.05M | 88.64M | 82.63M | 98.59M |
| Net Income | 58.16M | 39.81M | 38.46M | 11.64M | 52.06M |
Balance Sheet | |||||
| Total Assets | 763.75M | 493.35M | 569.36M | 572.11M | 601.56M |
| Cash, Cash Equivalents and Short-Term Investments | 222.76M | 46.16M | 117.89M | 106.40M | 128.32M |
| Total Debt | 308.97M | 261.27M | 377.99M | 420.45M | 430.48M |
| Total Liabilities | 391.77M | 302.97M | 417.35M | 458.73M | 467.84M |
| Stockholders Equity | 354.30M | 187.98M | 150.98M | 111.64M | 131.40M |
Cash Flow | |||||
| Free Cash Flow | 43.84M | 62.44M | 61.17M | 22.59M | 62.06M |
| Operating Cash Flow | 57.37M | 67.06M | 66.88M | 30.27M | 68.22M |
| Investing Cash Flow | -31.67M | -10.51M | -5.91M | -18.79M | -58.84M |
| Financing Cash Flow | 148.27M | -128.15M | -49.51M | -43.30M | 57.07M |
Turning Point Brands Technical Analysis
Negative
92.40
Price Trends
119.04
Negative
108.24
Negative
96.97
Negative
Market Momentum
-3.66
Positive
23.32
Positive
3.59
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TPB, the sentiment is Negative. The current price of 92.4 is below the 20-day moving average (MA) of 126.59, below the 50-day MA of 119.04, and below the 200-day MA of 96.97, indicating a bearish trend. The MACD of -3.66 indicates Positive momentum. The RSI at 23.32 is Positive, neither overbought nor oversold. The STOCH value of 3.59 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TPB.
Turning Point Brands Risk Analysis
Turning Point Brands disclosed 46 risk factors in its most recent earnings report. Turning Point Brands reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Turning Point Brands Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $2.75B | 29.81 | 4.71% | 0.35% | 51.49% | 21.43% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
59 Neutral | $1.77B | 34.13 | 21.45% | 0.28% | 6.71% | 8.16% | |
56 Neutral | $1.31B | 9.94 | 5.81% | 6.15% | 3.01% | -7.14% | |
46 Neutral | $108.85M | -6.07 | -254.99% | ― | -20.13% | -88.66% | |
44 Neutral | $2.02M | 5.96 | -133.50% | ― | -34.81% | 99.30% | |
40 Underperform | $316.05K | -0.38 | -68.63% | ― | -88.85% | 68.28% |
* Consumer Defensive 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.