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Turning Point Brands (TPB)
NYSE:TPB
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Turning Point Brands (TPB) AI Stock Analysis

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TPB

Turning Point Brands

(NYSE:TPB)

Rating:70Neutral
Price Target:
$102.00
▲(3.08% Upside)
Turning Point Brands has a strong earnings call performance and positive technical momentum, which are significant strengths. However, high valuation metrics and financial leverage pose risks. The company's ability to manage these challenges while capitalizing on growth opportunities in the Modern Oral segment will be crucial for future performance.
Positive Factors
Earnings
TPB delivered a strong 2Q beat and raised its outlook on modern oral revenue and consolidated EBITDA as a result of a better than expected 1H.
Growth Opportunities
The nicotine pouch opportunity could drive significant scale and upside to revenue over the long-term.
Negative Factors
Valuation
Much of the good news, notably expectations around the nicotine pouch opportunity, already appear to be embedded in valuation.

Turning Point Brands (TPB) vs. SPDR S&P 500 ETF (SPY)

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 streams. The company primarily earns from the sale of smokeless tobacco products and smoking accessories, which include rolling papers and other smoking-related items. Its New Generation Products segment, which encompasses vapor and CBD products, has been a significant growth area, capitalizing on the increasing consumer shift towards alternative nicotine delivery systems. TPB also benefits from strategic partnerships with distributors and retailers, enhancing its market reach and product accessibility. Additionally, the company invests in brand development and marketing to strengthen customer loyalty and drive sales across its diverse product lines.

Turning Point Brands Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q2-2025)
|
% Change Since: 21.95%|
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Positive
The earnings call for Turning Point Brands highlighted strong revenue growth, particularly in the Modern Oral segment, alongside increased EBITDA guidance. However, challenges remain with decreased Zig-Zag sales and tariff impacts.
Q2-2025 Updates
Positive Updates
Significant Revenue Growth
Revenue increased 25% year-over-year to $116.6 million for the quarter, with Modern Oral revenue contributing $30.1 million and representing 26% of total revenue.
Modern Oral Segment Expansion
Sales of white nicotine pouch brands increased nearly 8x year-over-year and 35% sequentially, with expectations to expand into retail sooner than planned.
Stoker's Segment Performance
Stoker's revenue increased 63% year-over-year to approximately $70 million, with MST sales growing 4% year-over-year.
Increased EBITDA Guidance
Adjusted EBITDA guidance for the full year was raised to a range of $110 million to $114 million, up from the previous $108 million to $113 million.
Strong Consumer Feedback
Continued favorable consumer and trade feedback for Modern Oral products, with increasing order and repeat purchase rates.
Negative Updates
Zig-Zag Revenue Decline
Zig-Zag sales decreased 6.9% year-over-year to $47 million, with gross margins declining 410 basis points due to product mix changes.
Tariff and Cost Challenges
Facing tariff impacts and temporarily elevated outbound freight charges, with ongoing efforts to mitigate these through inventory management and supplier negotiations.
Legacy Segment Headwinds
Expected second half headwinds in Zig-Zag segment due to cigars and CLIPPER lighters, with investments in lower-margin products being deemphasized.
Company Guidance
During the Turning Point Brands Second Quarter 2025 earnings call, CEO Graham Purdy highlighted the company's robust performance, with revenue rising 25% to $116.6 million, including $30.1 million from Modern Oral products, which now constitute 26% of total revenue. Adjusted EBITDA grew by 15% to $30.5 million, prompting an increased guidance range of $110 million to $114 million for the year. The company also adjusted its full-year nicotine pouch sales guidance to between $100 million and $110 million, up from the previous $80 million to $95 million. Notably, white nicotine pouch sales surged nearly 8x year-over-year and 35% sequentially. The company continues to invest in sales force expansion, aiming to double its size by 2026, and is also ramping up marketing efforts, including a new partnership with Professional Bull Riders. Gross margin improved to 57.1%, up 310 basis points year-over-year, with SG&A expenses rising to $40.3 million due to sales and marketing investments. The company ended the quarter with $109.1 million in cash and anticipates capital expenditures of $4 million to $5 million for 2025.

Turning Point Brands Financial Statement Overview

Summary
Turning Point Brands demonstrates solid financial health with strong revenue and profit growth, robust cash flow, and improved equity ratios. However, high leverage remains a concern, requiring careful management to mitigate risks. Overall, the company is well-positioned for future growth, supported by strong operational performance and effective cash management.
Income Statement
78
Positive
Turning Point Brands shows strong profitability with a consistent gross profit margin around 47%, and a solid net profit margin improvement from 2.8% in 2022 to 9% in TTM. Revenue growth is positive, with a 29.2% increase from 2022 to 2024 and a further 29.2% from 2024 to TTM, indicating robust expansion. EBIT and EBITDA margins have remained stable, supporting a strong operational performance.
Balance Sheet
65
Positive
The company exhibits a high debt-to-equity ratio of 1.48 in TTM, reflecting significant leverage, which poses a risk. However, the equity ratio improved to 36% in TTM, indicating better equity health. Return on equity has improved from lows of 10.4% in 2022 to 20.7% in TTM, demonstrating enhanced shareholder returns.
Cash Flow
74
Positive
Operating cash flow is strong relative to net income, with a ratio of 1.46 in TTM. The free cash flow to net income ratio is 1.31 in TTM, indicating robust cash generation. Free cash flow growth is positive, with a 145% increase from 2022 to 2024, albeit a slight decrease to TTM, suggesting overall healthy cash flow management.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue474.27M360.66M405.39M415.01M445.47M405.11M
Gross Profit232.35M201.56M203.24M205.54M217.83M189.64M
EBITDA93.54M84.60M82.69M40.80M90.55M67.52M
Net Income43.65M39.81M38.46M11.64M52.06M38.19M
Balance Sheet
Total Assets595.79M493.35M569.36M572.11M601.56M489.33M
Cash, Cash Equivalents and Short-Term Investments109.92M46.16M117.89M106.40M128.32M41.77M
Total Debt301.48M261.27M377.99M417.35M427.51M306.08M
Total Liabilities370.96M302.97M417.35M458.73M467.84M358.49M
Stockholders Equity218.58M187.98M150.98M111.64M131.40M126.79M
Cash Flow
Free Cash Flow52.27M62.44M61.17M22.59M62.06M37.54M
Operating Cash Flow60.22M67.06M66.88M30.27M68.22M43.68M
Investing Cash Flow-11.16M-10.51M-5.91M-18.79M-58.84M-64.82M
Financing Cash Flow-81.22M-128.15M-49.51M-43.30M57.07M-29.34M

Turning Point Brands Technical Analysis

Technical Analysis Sentiment
Positive
Last Price98.95
Price Trends
50DMA
83.35
Positive
100DMA
75.29
Positive
200DMA
68.12
Positive
Market Momentum
MACD
4.77
Positive
RSI
68.81
Neutral
STOCH
34.37
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 98.95 is above the 20-day moving average (MA) of 94.55, above the 50-day MA of 83.35, and above the 200-day MA of 68.12, indicating a bullish trend. The MACD of 4.77 indicates Positive momentum. The RSI at 68.81 is Neutral, neither overbought nor oversold. The STOCH value of 34.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
$1.37B13.597.20%5.92%4.11%-15.50%
70
Neutral
$1.78B40.6226.05%0.29%4.44%-5.94%
63
Neutral
$20.46B14.51-3.60%3.15%2.60%-5.31%
49
Neutral
$171.44M-110.47%-1.69%-106.13%
38
Underperform
$6.50M-616.13%-49.46%99.12%
38
Underperform
$4.62M-149.74%-72.92%85.19%
31
Underperform
$11.22M-88.92%-86.91%59.47%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TPB
Turning Point Brands
98.49
59.29
151.25%
UVV
Universal
54.90
3.71
7.25%
XXII
22nd Century
1.81
-1,208.52
-99.85%
GNLN
Greenlane Holdings
3.33
-3,919.17
-99.92%
KAVL
Kaival Brands Innovations Group
0.97
0.32
49.23%
ISPR
Ispire Technology, Inc.
3.00
-4.22
-58.45%

Turning Point Brands Corporate Events

Executive/Board ChangesShareholder Meetings
Turning Point Brands Holds Annual Stockholders Meeting
Neutral
May 9, 2025

Turning Point Brands, Inc. held its Annual Meeting of Stockholders on May 6, 2025, where key decisions were made regarding the election of directors, an amendment to limit liability of certain officers, the ratification of KPMG LLP as the independent registered public accountant for 2025, and an advisory vote on executive compensation. These decisions are pivotal for the company’s governance and financial oversight, potentially impacting its operational stability and stakeholder confidence.

Financial Disclosures
Turning Point Brands Reports Strong Q1 2025 Growth
Positive
May 7, 2025

Turning Point Brands announced its financial results for the first quarter of 2025, reporting a 28.1% increase in net sales to $106.4 million compared to the previous year. The company saw significant growth in its Stoker’s Products segment, with net sales rising by 62.7%, and Modern Oral sales reaching $22.3 million. Adjusted EBITDA increased by 12.0% to $27.7 million, and the company reaffirmed its full-year adjusted EBITDA guidance while raising its sales guidance for nicotine pouches. These results suggest a strong market position and potential for continued growth, particularly in the Modern Oral segment.

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.Date of analysis: Aug 07, 2025