Turning Point Brands (TPB) AI Stock Analysis

• Market Cap: $1.13B
• Dividend Yield: 0.45%
• Average Volume (3M): 181.69K
• Price to Earnings (P/E): 29.8
• Beta (1Y): 0.75
• Revenue Growth: -0.13%
• EPS Growth: 2.92%
• Country: US
• Employees: 310
• Sector: Consumer Defensive
• Sector Strength: 77
• Industry: Tobacco
• EPS (TTM): 2.13
• Shares Outstanding: 17,760,757
• 10 Day Avg. Volume: 135,087
• 30 Day Avg. Volume: 181,688
• PEG Ratio: 10.19
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 6.52
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $81.67
• Price Target Upside: 28.25% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

Turning Point Brands shows strong financial management with improved margins and cash flow. The earnings call provided a positive outlook, with significant revenue growth in key segments. However, negative operational margins and high valuation metrics present challenges. Technical indicators suggest caution in the short term, but longer-term trends remain positive. The company must address operational inefficiencies to sustain growth.

Positive Factors

Brand Portfolio

With a strong portfolio of iconic brands, including Zig-Zag rolling papers and Stoker’s chewing tobacco, Turning Point Brands represents an interesting investment opportunity.

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.

Negative Factors

Revenue Drag

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, 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 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. The 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: Positive
• Last Price: 63.68
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 63.68 is above the 20-day moving average (MA) of 58.19, above the 50-day MA of 60.30, and above the 200-day MA of 52.58, indicating a bullish trend. The MACD of 0.73 indicates Negative momentum. The RSI at 68.84 is Neutral, neither overbought nor oversold. The STOCH value of 90.92 is Negative, 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
UVV	70 Outperform	$1.44B	11.65	8.79%	5.54%	12.88%	-5.64%
Sector *	64 Neutral	$8.88B	14.97	4.71%	174.26%	3.67%	4.40%
TPB	59 Neutral	$1.13B	29.78	27.80%	0.45%	-0.13%	2.92%
ISPR	49 Neutral	$163.85M	―	-86.30%	―	5.10%	-137.46%
GNLN	41 Neutral	$85.04K	―	-200.95%	―	-79.69%	89.11%
XXII	32 Underperform	$2.38M	―	-385.90%	―	-65.44%	96.80%
KAVL	31 Underperform	$5.87M	―	-70.92%	―	-71.85%	59.22%

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.