Value
5.7/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 4.5 |
| P/S | 8.6 |
| EV/EBITDA | 0.7 |
| Fwd P/E | 4.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 29.9x
TPB · Why this verdict
Why Turning Point Brands (TPB) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score5.3/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Turning Point Brands has beaten earnings estimates in all four of the last four quarters with an average positive surprise of 16%, carries a wide economic moat score of 7.5 out of 10, and analysts see 58% upside potential, yet the stock is in a confirmed death cross downtrend with an RSI of 35 and an elevated put-to-call ratio of 1.69, creating a wide gap between fundamental value and current market sentiment.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow is negative at -30% of net income, representing a red flag that reported earnings are not being backed by cash generation, creating a risk that shareholder returns are funded by borrowing or asset sales rather than operational cash flows. Quality breakdown | Free cash flow turns positive and exceeds 50% of net income within the next 2 annual reporting periods. | →Stable |
| CounterNegative free cash flow relative to earnings in a consumer defensive company with a 16% earnings beat average may reflect investment in growth initiatives that will generate returns over time rather than a structural quality problem. | ||
Turning Point Brands holds a wide economic moat score of 7.5 out of 10 alongside a perfect four-quarter earnings beat streak averaging 16% positive surprises, suggesting durable competitive advantages are protecting margins and enabling consistent outperformance. Quality breakdown | Earnings beats continue in at least 3 of the next 4 quarters and the moat score remains above 6.5. | →Stable |
| CounterTobacco-adjacent consumer defensive companies can appear moat-protected until regulatory changes or consumer shift to alternative nicotine products erode the franchise; the death cross may reflect structural rather than cyclical headwinds. | ||
Analyst consensus targets imply 58% upside from the current price of $82.05 to the target of approximately $113, one of the widest divergences between price and analyst consensus in the consumer defensive space, suggesting either the market is deeply discounting the business or analysts have not yet revised targets lower. Sentiment breakdown | Price rises above $100, more than 22% above the current $82.05, within 12 months as the death cross resolves and fundamental strength reasserts. | →Stable |
| CounterLarge price-to-target gaps in stocks with death cross patterns often persist for extended periods; analyst targets in tobacco-adjacent companies can lag reality by 12-18 months when structural headwinds emerge. | ||
The put-to-call ratio of 1.69 and RSI of 35 indicate that options market participants are positioned defensively and price momentum is approaching oversold territory but has not yet triggered a technical reversal, leaving the timing of any recovery uncertain. Risk breakdown | RSI rises above 50 and the put-to-call ratio falls below 1.0 within 6 months as technical conditions normalize. | ↑Improving |
| CounterAn RSI of 35 in a falling-knife technical setup can remain depressed for many months in small-cap consumer stocks with thin institutional support; the elevated put-to-call ratio may reflect informed hedging rather than speculative excess. | ||
Free cash flow is negative at -30% of net income, representing a red flag that reported earnings are not being backed by cash generation, creating a risk that shareholder returns are funded by borrowing or asset sales rather than operational cash flows.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive and exceeds 50% of net income within the next 2 annual reporting periods.
CounterNegative free cash flow relative to earnings in a consumer defensive company with a 16% earnings beat average may reflect investment in growth initiatives that will generate returns over time rather than a structural quality problem.
Turning Point Brands holds a wide economic moat score of 7.5 out of 10 alongside a perfect four-quarter earnings beat streak averaging 16% positive surprises, suggesting durable competitive advantages are protecting margins and enabling consistent outperformance.
→StableQuality breakdown
- Expectation
- Earnings beats continue in at least 3 of the next 4 quarters and the moat score remains above 6.5.
CounterTobacco-adjacent consumer defensive companies can appear moat-protected until regulatory changes or consumer shift to alternative nicotine products erode the franchise; the death cross may reflect structural rather than cyclical headwinds.
Analyst consensus targets imply 58% upside from the current price of $82.05 to the target of approximately $113, one of the widest divergences between price and analyst consensus in the consumer defensive space, suggesting either the market is deeply discounting the business or analysts have not yet revised targets lower.
→StableSentiment breakdown
- Expectation
- Price rises above $100, more than 22% above the current $82.05, within 12 months as the death cross resolves and fundamental strength reasserts.
CounterLarge price-to-target gaps in stocks with death cross patterns often persist for extended periods; analyst targets in tobacco-adjacent companies can lag reality by 12-18 months when structural headwinds emerge.
The put-to-call ratio of 1.69 and RSI of 35 indicate that options market participants are positioned defensively and price momentum is approaching oversold territory but has not yet triggered a technical reversal, leaving the timing of any recovery uncertain.
↑ImprovingRisk breakdown
- Expectation
- RSI rises above 50 and the put-to-call ratio falls below 1.0 within 6 months as technical conditions normalize.
CounterAn RSI of 35 in a falling-knife technical setup can remain depressed for many months in small-cap consumer stocks with thin institutional support; the elevated put-to-call ratio may reflect informed hedging rather than speculative excess.
Per-dimension breakdown
Quality
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.9 |
| ROA | 3.8 |
| Gross margin | 7.3 |
| Op margin | 1.7 |
| Net margin | 4.4 |
| Current ratio | 7.3 |
| FCF quality | 0.0 |
| Moat | 7.6 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -18% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
- ▸Strong Piotroski F-Score: 7/9
Growth
4.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 8.1 |
| EPS growth | 0.0 |
- ▸Strong growth: 23% YoY
Momentum
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 2.9 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 0.9 |
- ▸Overbought bear rally (RSI 72)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -7.0%/30d — confirmed downtrend
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 5.0 |
| Price target | 9.9 |
- ▸Analyst upside: 77%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
6.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.0 |
| quality rank | 4.3 |
| growth rank | 8.0 |
Technical
0.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.2 |
| support resistance | 1.4 |
| 52w position | 0.0 |
Risk (lower is worse)
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.5 |
| days to cover | 4.0 |
| volatility | 1.7 |
| put call | 1.9 |
| implied vol | 0.0 |
| beta | 7.2 |
| debt equity | 6.9 |
- ▸Short squeeze setup: 17% short, quality 7.5
- ▸Elevated put/call: 1.71
- ▸High IV: 85%
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 7.3 |
| dividend safety | 4.3 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/0M
- ▸Earnings in 10 days
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- MOMENTUM:5.6>=5.5
- ASYMMETRY:3.6>=1.5
- INSIDER:OK
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- DEATH_CROSS:momentum=5.6>=5.0 recovering
- EARNINGS_PROXIMITY:10d<=14d (soft)
Reward-to-Risk
3.57
Upside
+53.6%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 72
EdgeCatalyst-Driven — Earnings in 10d with 3/4 beat streak
SuitabilitySpeculative — Drawdown -54% (>40% off 52w high)
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.6>=5.5. Top dim: Insider at 7.3; weakest: Technical at 0.9. No conviction either direction.
The strongest dimensions are Insider at 7.3, Sentiment at 6.5, and Catalyst at 6.1; the weakest are Technical at 0.9, Growth at 4.0, and Risk (lower is worse) at 4.2. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 3.57 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Wide Economic Moat With Beat Streak
Trip ifEPS surprise falls below 0% in at least 3 of the next 4 quarters, signaling that the moat is not protecting margins from competitive or regulatory pressure.
- P2Large Analyst Upside Gap
Trip ifAnalyst consensus price targets decline below $90, more than 20% below current targets, indicating broad-based downward revision.
- P3Elevated Put Call And Negative Momentum
Trip ifPut-to-call ratio rises above 2.5 and RSI remains below 40 for more than 30 consecutive trading days.
- P4Negative Free Cash Flow Quality
Trip ifFree cash flow remains negative for 3 consecutive quarters, suggesting the earnings quality problem is more than temporary.