Turning Point Brands (TPB) AI Stock Analysis

• Market Cap: $1.05B
• Dividend Yield: 0.47%
• Average Volume (3M): 255.63K
• Price to Earnings (P/E): 27.7
• Beta (1Y): 0.72
• Revenue Growth: -0.13%
• EPS Growth: 2.92%
• Country: US
• Employees: 373
• Sector: Consumer Defensive
• Sector Strength: 79
• Industry: Tobacco
• EPS (TTM): 2.13
• Shares Outstanding: 17,747,116
• 10 Day Avg. Volume: 296,594
• 30 Day Avg. Volume: 255,631
• PEG Ratio: 9.48
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.92
• Price to Cash Flow (P/CF): 14.80
• P/FCF Ratio: 15.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $81.67
• Price Target Upside: 43.43% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

Turning Point Brands demonstrates financial resilience with strong cash flow and improved leverage ratios, despite declining revenue and operational challenges. The earnings call was positive, highlighting growth in key segments and optimism for future performance. Technical indicators suggest potential for recovery, but current valuation appears high. Overall, the stock is reasonably positioned for cautious optimism but requires careful monitoring of revenue trends and operational improvements.

Positive Factors

Growth Opportunities

The company has numerous growth opportunities within its core Zig-Zag segment, including expansion into dispensaries, smoke shops and headshops, while the Stoker’s segment enjoys higher prices and share gains.

Market Expansion

TPB launched a nicotine pouch brand called FRE to address the fast-growing ~$3B market.

Negative Factors

Revenue Challenges

The revenue drag from its low-margin vape hardware distribution business should be less prevalent as management prioritizes higher growth/margin opportunities, which is expected to drive gross margin improvement.

Turning Point Brands Business Overview & Revenue Model

Company Description

Turning Point Brands (TPB) is a publicly traded company that specializes in providing high-quality tobacco products, alternative smoking accessories, and innovative vaping solutions. The company operates through three primary segments: Zig-Zag, Stoker's, and NewGen. Zig-Zag offers rolling papers and related products, Stoker's provides moist snuff and loose leaf chewing tobacco, while NewGen focuses on electronic cigarettes, vaporizers, and other modern nicotine delivery systems.

How the Company Makes Money

Turning Point Brands generates revenue through the sale of tobacco-related products and alternative smoking solutions across its three segments. The Zig-Zag segment primarily earns from the sale of branded rolling papers and accessories, capitalizing on the strong brand recognition and consumer loyalty. The Stoker's segment drives revenue through the sale of traditional tobacco products, such as moist snuff and chewing tobacco. The NewGen segment contributes to earnings by offering modern alternatives, including e-cigarettes and vaping products, catering to shifting consumer preferences towards less traditional nicotine consumption methods. Additionally, TPB benefits from strategic distribution partnerships and a diversified portfolio that mitigates risks associated with regulatory changes in the tobacco industry.

Turning Point Brands Financial Statement Overview

Summary

Turning Point Brands shows resilience in profitability and cash flow management despite revenue declines. Improvement in margins and leverage ratios signifies enhanced operational efficiency and financial stability. However, negative EBIT and EBITDA margins indicate underlying operational challenges that need addressing. The company is well-positioned with strong cash flow and improved equity ratios, but must focus on reigniting revenue growth to maintain long-term sustainability.

Income Statement

Turning Point Brands has experienced a decline in revenue over the past year, with a Revenue Growth Rate of -11.02% from 2023 to 2024. The Gross Profit Margin remained stable at around 55.9%, indicating consistent cost management relative to revenue. However, the Net Profit Margin improved significantly to 11.04% from 9.49% the previous year, showing enhanced profitability. The EBIT and EBITDA margins turned negative, suggesting operational challenges.

Balance Sheet

The company's Debt-to-Equity Ratio has improved from 2.50 in 2023 to 1.36 in 2024, reflecting decreased leverage and a healthier balance sheet. Return on Equity (ROE) increased to 20.90%, which indicates efficient use of equity to generate profits. The Equity Ratio also improved to 38.60%, suggesting a stronger equity position relative to assets and reduced financial risk.

Cash Flow

Free Cash Flow grew by 2.07% in 2024, indicating strong cash generation capabilities. The Operating Cash Flow to Net Income Ratio is robust at 1.68, highlighting efficient cash conversion from earnings. Free Cash Flow to Net Income Ratio is also favorable at 1.57, suggesting good free cash flow generation relative to net income, despite revenue challenges.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
360.66M	405.39M	415.01M	445.47M	405.11M
	Gross Profit
201.56M	203.24M	205.54M	217.83M	189.64M
	EBIT
80.83M	82.58M	75.51M	90.32M	64.07M
	EBITDA
84.60M	82.69M	40.80M	90.55M	67.52M
	Net Income Common Stockholders
39.81M	38.46M	11.64M	52.06M	38.19M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
46.16M	117.89M	106.40M	128.32M	41.77M
	Total Assets
493.35M	569.36M	572.11M	601.56M	489.33M
	Total Debt
258.15M	377.99M	417.35M	427.51M	306.08M
	Net Debt
212.00M	260.10M	310.95M	299.19M	264.31M
	Total Liabilities
302.97M	417.35M	458.73M	467.84M	358.49M
	Stockholders Equity
190.38M	150.98M	111.64M	131.40M	126.79M
Cash Flow		Free Cash Flow
62.44M	61.17M	22.59M	62.06M	37.54M
	Operating Cash Flow
67.06M	66.88M	30.27M	68.22M	43.68M
	Investing Cash Flow
-10.51M	-5.91M	-18.79M	-58.84M	-64.82M
	Financing Cash Flow
-128.28M	-49.51M	-43.30M	57.07M	-29.34M

Turning Point Brands Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 56.94
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Positive
• STOCH: 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 56.94 is below the 20-day moving average (MA) of 66.14, below the 50-day MA of 62.67, and above the 200-day MA of 48.16, indicating a neutral trend. The MACD of -1.46 indicates Positive momentum. The RSI at 28.60 is Positive, neither overbought nor oversold. The STOCH value of 10.00 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TPB.

Turning Point Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IMBBY	74 Outperform	$29.28B	9.31	45.38%	5.32%	5.61%	23.39%
MO	72 Outperform	$98.31B	8.89	-503.31%	6.92%	-0.28%	43.51%
PM	67 Neutral	$236.49B	33.65	-37142.11%	3.50%	7.75%	-9.85%
Sector *	63 Neutral	$20.77B	13.59	-10.67%	7.41%	1.48%	9.07%
UVV	62 Neutral	$1.34B	10.89	8.32%	5.95%	12.88%	-6.33%
BTI	61 Neutral	$89.85B	23.48	5.87%	7.11%	-2.51%	―
TPB	61 Neutral	$1.05B	27.71	27.80%	0.47%	-0.13%	2.92%

Turning Point Brands Corporate Events

Turning Point Brands Reports Strong Q3 2024 Results

Turning Point Brands reported robust third-quarter 2024 results with a 3.8% rise in consolidated net sales to $105.6 million and a notable 11.3% surge in adjusted EBITDA to $27.2 million. The company saw significant growth in its Zig-Zag and Stoker’s product lines, with net sales increasing 5.5% and 12.1% respectively. Buoyed by these positive results, TPB raised its full-year EBITDA guidance, underlining a strong market position and optimistic growth trajectory.