tiprankstipranks
Trending News
More News >
Turning Point Brands Inc (TPB)
:TPB

Turning Point Brands (TPB) AI Stock Analysis

Compare
325 Followers

Top Page

TP

Turning Point Brands

(NYSE:TPB)

Rating:68Neutral
Price Target:
$76.00
▲(0.66%Upside)
Turning Point Brands shows strong financial performance with significant revenue growth and an optimistic outlook from recent earnings calls. However, high leverage and a relatively high P/E ratio pose risks. Technical indicators suggest a cautious approach in the short term. Overall, the company is well-positioned for growth with some risks that need management.
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 (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 the sale of its branded products within the Smokeless, Smoking, and NewGen segments. The Smokeless Products segment primarily includes moist snuff and loose leaf chewing tobacco. The Smoking Products segment features rolling papers, make-your-own cigar wraps, and related accessories. The NewGen segment focuses on emerging market products, including vaping products and other alternative smoking solutions. TPB leverages a strong distribution network and strategic partnerships to ensure broad market reach and product availability. The company's revenue model is bolstered by its ability to capitalize on brand equity and consumer loyalty, alongside its efforts to innovate and adapt to changing market trends.

Turning Point Brands Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 16.35%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call depicted a positive outlook with strong revenue growth, especially in modern oral nicotine products, and increased guidance for nicotine sales. However, challenges such as decreased gross margins, minor Zig-Zag segment growth, and anticipated tariff and FX impacts were noted.
Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Revenue increased by 28% to $106.4 million for the quarter, indicating strong performance compared to expectations.
Significant Growth in Modern Oral Nicotine Products
Modern oral revenue was $22.3 million, with white pouch sales increasing nearly 10x year-over-year and 2x sequentially.
Stoker's Segment Success
Stoker's revenue increased 63% to $59.2 million, with a 4% increase in loose leaf and a 10% increase in MST.
Increased Guidance for Nicotine Pouch Sales
Full year consolidated nicotine pouch sales guidance increased to $80 million to $95 million from $60 million to $80 million.
Negative Updates
Decreased Gross Margin
Gross margin was 56%, down 220 basis points year-over-year, attributed to mix-driven changes.
Zig-Zag Segment Challenges
Zig-Zag revenue increased only 1% year-over-year, with anticipated headwinds from cigars in Q2.
Tariff and FX Headwinds
A $5 million to $7 million tariff impact and FX headwinds in the Zig-Zag segment from a stronger euro are anticipated.
Company Guidance
During the Turning Point Brands Q1 2025 conference call, the company reported a 28% increase in revenue to $106.4 million, with adjusted EBITDA rising 12% to $27.7 million. Full-year adjusted EBITDA guidance was reaffirmed at $108 million to $113 million. The company increased its full-year consolidated nicotine pouch sales guidance to $80 million to $95 million, up from a previous range of $60 million to $80 million. Notably, white nicotine pouch sales saw a significant increase, growing nearly 10x year-over-year. The Stoker's segment experienced a 63% revenue increase to $59.2 million, and Zig-Zag revenue grew by 1% in the first quarter. The company is making strategic investments to capitalize on the growing nicotine pouch market, including expanding its sales force and improving distribution channels. Gross margin for the quarter was 56%, with SG&A expenses totaling $36.4 million. The company ended the quarter with $99.6 million in cash and reported a free cash flow of $12.4 million.

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.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
466.15M360.66M405.39M415.01M445.47M405.11M
Gross Profit
219.57M201.56M203.24M205.54M217.83M189.64M
EBIT
86.18M80.83M82.58M75.51M90.32M64.07M
EBITDA
86.82M84.60M82.69M40.80M90.55M67.52M
Net Income Common Stockholders
42.17M39.81M38.46M11.64M52.06M38.19M
Balance SheetCash, Cash Equivalents and Short-Term Investments
99.64M46.16M117.89M106.40M128.32M41.77M
Total Assets
564.55M493.35M569.36M572.11M601.56M489.33M
Total Debt
301.63M261.27M377.99M417.35M427.51M306.08M
Net Debt
201.99M215.12M260.10M310.95M299.19M264.31M
Total Liabilities
361.12M302.97M417.35M458.73M467.84M358.49M
Stockholders Equity
203.44M190.38M150.98M111.64M131.40M126.79M
Cash FlowFree Cash Flow
55.26M62.44M61.17M22.59M62.06M37.54M
Operating Cash Flow
61.70M67.06M66.88M30.27M68.22M43.68M
Investing Cash Flow
-7.75M-10.51M-5.91M-18.79M-58.84M-64.82M
Financing Cash Flow
-85.06M-128.15M-49.51M-43.30M57.07M-29.34M

Turning Point Brands Technical Analysis

Technical Analysis Sentiment
Positive
Last Price75.50
Price Trends
50DMA
66.95
Positive
100DMA
64.92
Positive
200DMA
57.75
Positive
Market Momentum
MACD
2.04
Positive
RSI
60.63
Neutral
STOCH
30.01
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 75.5 is above the 20-day moving average (MA) of 74.07, above the 50-day MA of 66.95, and above the 200-day MA of 57.75, indicating a bullish trend. The MACD of 2.04 indicates Positive momentum. The RSI at 60.63 is Neutral, neither overbought nor oversold. The STOCH value of 30.01 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 (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TPTPB
68
Neutral
$1.35B33.0727.53%0.40%3.17%-2.23%
UVUVV
68
Neutral
$1.51B16.166.56%5.31%7.23%-20.91%
65
Neutral
$8.89B14.914.67%6.16%3.60%-2.89%
50
Neutral
$144.01M-110.47%-1.69%-106.13%
41
Neutral
$7.86M-113.32%-78.81%92.54%
40
Underperform
$5.29M-385.90%-56.65%99.11%
31
Underperform
$6.23M-88.92%-71.85%59.22%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TPB
Turning Point Brands
75.50
43.69
137.35%
UVV
Universal
60.33
16.35
37.18%
XXII
22nd Century
0.65
-89.50
-99.28%
GNLN
Greenlane Holdings
0.01
-5.41
-99.82%
KAVL
Kaival Brands Innovations Group
0.53
-3.65
-87.32%
ISPR
Ispire Technology, Inc.
2.47
-4.85
-66.26%

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.