Turning Point Brands (TPB) AI Stock Analysis

• Market Cap: $1.92B
• Dividend Yield: 0.29%
• Average Volume (3M): 340.33K
• Price to Earnings (P/E): 35.5
• Beta (1Y): 0.54
• Revenue Growth: 6.71%
• EPS Growth: 8.16%
• Country: US
• Employees: 310
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Tobacco
• EPS (TTM): 1.13
• Shares Outstanding: 19,070,757
• 10 Day Avg. Volume: 162,294
• 30 Day Avg. Volume: 340,332
• PEG Ratio: -6.26
• Price to Book (P/B): 5.67
• Price to Sales (P/S): 2.96
• P/FCF Ratio: 17.07
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 4.52
• Enterprise Value/Gross Profit: 7.91
• Enterprise Value/Ebitda: 16.67
• 1Y Price Target: $117.50
• Price Target Upside: 15.80% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 3.58
• Revenue Forecast (FY): $443.93M

• Rating: 68 Neutral
• Price Target: $110.00 ▲(8.41% Upside)

Turning Point Brands' overall score reflects a mix of strong earnings growth and strategic investments, tempered by financial and valuation challenges. The earnings call and corporate events highlight positive future prospects, while technical indicators suggest bullish momentum. However, high valuation and cash flow concerns weigh on the score.

Positive Factors

Modern Oral Segment Expansion

The significant growth in the Modern Oral segment indicates strong demand and successful market penetration, positioning TPB well in the alternative nicotine market.

Stoker's Segment Growth

Robust growth in the Stoker's segment highlights TPB's ability to leverage its established brands, contributing to stable revenue streams and market presence.

Successful Capital Raise

The capital raise provides TPB with financial flexibility to invest in growth initiatives, particularly in expanding its Modern Oral business, supporting long-term strategic goals.

Negative Factors

Zig-Zag Revenue Decline

The decline in Zig-Zag revenue suggests potential brand challenges or shifts in consumer preferences, which could impact TPB's traditional product lines.

Negative Free Cash Flow

Negative free cash flow indicates potential liquidity issues, limiting TPB's ability to reinvest in its business and manage debt effectively.

Promotional Environment Challenges

Competitive pressures in the Modern Oral category may lead to pricing challenges, affecting margins and profitability in a key growth area for TPB.

Turning Point Brands Business Overview & Revenue Model

Company Description

Turning Point Brands, Inc. (TPB) is a consumer goods company focused on the alternative products sector, primarily in the tobacco and cannabis industries. The company operates through two main segments: Smokeless Products and Smoking Products. TPB offers a diverse range of products, including smokeless tobacco, cigars, and vaping products, alongside its growing portfolio of hemp-derived products. With a commitment to innovation and quality, Turning Point Brands aims to cater to evolving consumer preferences in the tobacco and alternative product markets.

How the Company Makes Money

Turning 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 Financial Statement Overview

Summary

Turning Point Brands shows a stable financial position with strong gross margins but faces challenges with declining revenue and net profit margins. Improved leverage management is noted, but cash flow issues persist, with declining free cash flow growth.

Income Statement

Turning Point Brands has shown a mixed performance in its income statement. The TTM (Trailing-Twelve-Months) gross profit margin is strong at 57.17%, indicating efficient cost management. However, the net profit margin has decreased to 12.63% from previous years, reflecting challenges in maintaining profitability. Revenue growth has been negative, with a decline of 8.13% in the TTM period, suggesting potential market or operational challenges. The EBIT margin is relatively stable at 15.42%, but the EBITDA margin has decreased to 22.13%, indicating some pressure on operational efficiency.

Balance Sheet

The balance sheet shows a moderate financial position. The debt-to-equity ratio has improved to 0.85 in the TTM period, indicating better leverage management compared to previous years. However, the return on equity (ROE) is 22.05%, which, while decent, reflects a decrease from past performance. The equity ratio stands at 48.21%, suggesting a balanced capital structure but with room for improvement in equity financing.

Cash Flow

Cash flow analysis reveals some concerns. The free cash flow growth rate has declined by 25.46% in the TTM period, indicating potential cash generation issues. The operating cash flow to net income ratio is 0.70, showing a decrease in cash conversion efficiency. The free cash flow to net income ratio is 0.78, suggesting that the company is generating less free cash flow relative to its net income compared to previous periods.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	435.72M	360.66M	325.06M	321.23M	445.47M	405.11M
Gross Profit	249.08M	201.56M	182.94M	177.83M	217.83M	189.99M
EBITDA	118.16M	94.05M	88.64M	82.63M	98.59M	72.06M
Net Income	52.37M	39.81M	38.46M	11.64M	52.06M	38.19M
Balance Sheet
Total Assets	742.85M	493.35M	569.36M	572.11M	601.56M	496.05M
Cash, Cash Equivalents and Short-Term Investments	201.19M	46.16M	117.89M	106.40M	128.32M	41.77M
Total Debt	307.17M	261.27M	377.99M	420.45M	430.48M	333.46M
Total Liabilities	384.69M	302.97M	417.35M	458.73M	467.84M	378.56M
Stockholders Equity	343.95M	187.98M	150.98M	111.64M	131.40M	113.44M
Cash Flow
Free Cash Flow	38.97M	62.44M	61.17M	22.59M	62.06M	37.54M
Operating Cash Flow	50.26M	67.06M	66.88M	30.27M	68.22M	43.68M
Investing Cash Flow	-29.83M	-10.51M	-5.91M	-18.79M	-58.84M	-64.82M
Financing Cash Flow	147.49M	-128.15M	-49.51M	-43.30M	57.07M	-29.34M

Turning Point Brands Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 101.47
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TPB, the sentiment is Positive. The current price of 101.47 is above the 20-day moving average (MA) of 99.61, above the 50-day MA of 94.83, and above the 200-day MA of 80.74, indicating a bullish trend. The MACD of 1.17 indicates Positive momentum. The RSI at 59.56 is Neutral, neither overbought nor oversold. The STOCH value of 71.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TPB.

Turning Point Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RLX	76 Outperform	$2.97B	28.14	4.71%	0.33%	51.49%	21.43%
TPB	68 Neutral	$1.92B	35.50	22.54%	0.29%	6.71%	8.16%
UVV	68 Neutral	$1.30B	11.77	7.72%	6.24%	3.01%	-7.14%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
ISPR	51 Neutral	$131.77M	―	-254.99%	―	-20.13%	-88.66%
XXII	45 Neutral	$4.88M	>-0.01	-133.50%	―	-34.81%	99.30%
KAVL	31 Underperform	$5.74M	-0.60	-68.63%	―	-88.85%	68.28%

Turning Point Brands Corporate Events

Turning Point Brands Increases Stock Sale by $200M

On December 13, 2024, Turning Point Brands, Inc. entered into an at-the-market sales agreement with B. Riley Securities, Inc. and Barclays Capital Inc. to issue and sell shares of its common stock. The company has amended its prospectus supplement to increase the aggregate dollar amount of common stock available for sale by $200 million, following previous sales totaling nearly $100 million. This move could potentially enhance the company’s financial flexibility and market positioning.