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On Monday, Telsey Advisory Group maintained a Market Perform rating on Traeger Inc. (NYSE:COOK) with a steady price target of $2.50. The decision came after the firm’s analysts attended Traeger’s Summit event, which showcased the company’s strong brand community and introduced new products. Currently trading at $1.49, near its 52-week low of $1.44, InvestingPro data suggests the stock is in oversold territory, with multiple indicators pointing to potential value opportunities. InvestingPro subscribers have access to 14 additional key insights about COOK’s market position. The event featured hundreds of Traeger’s influencers, distributors, and employees, and included a demonstration of the new Woodbridge grill line, as well as the launch of a new iteration of the Flatrock flat-top griddle product line.
Telsey analysts highlighted the potential for Traeger to outperform within the grill industry due to efforts in raising brand awareness, engaging with customers, and launching innovative products such as the Flatrock and Woodbridge lines. With annual revenue of $604 million and a healthy gross margin of 42.29%, the company shows strong operational efficiency. The company’s expansion into adjacent categories, the growth of recurring revenues through consumables and grocery distribution, and international expansion were also noted as positive factors. A current ratio of 1.99 indicates solid financial flexibility to support these growth initiatives.
Despite the optimism around brand initiatives and product innovation, Telsey analysts expressed caution regarding the broader economic environment. They anticipate macroeconomic headwinds to continue affecting demand and noted that tariffs present additional risks. The analysts also pointed out that Traeger’s promotional strategy in 2024 could make year-over-year comparisons more challenging in 2025.
The price target of $2.50 is based on an enterprise value to EBITDA (EV/EBITDA) multiple of approximately 8 times applied to the firm’s 2026 EBITDA estimate of $90 million. For comparison, Traeger currently trades at an EV/EBITDA of 11.5x. This valuation reflects a careful balance between the company’s strategic growth efforts and the potential challenges it faces in the current economic climate. For a deeper understanding of COOK’s valuation and growth prospects, InvestingPro offers comprehensive Research Reports with detailed analysis of 1,400+ stocks, including Traeger, transforming complex financial data into actionable insights.
In other recent news, Traeger Inc. reported its fourth-quarter 2024 earnings, exceeding expectations with an EPS of $0.01, surpassing the forecast of -$0.0015. The company’s revenue reached $169 million, marking a 3% increase year-over-year, with significant growth in the Grills segment. Despite these positive results, Traeger’s future guidance remains cautious, with projected revenue for 2025 ranging from $595 million to $615 million. Canaccord Genuity maintained a Buy rating on Traeger, though it lowered the price target from $7 to $5, reflecting the company’s conservative outlook and the potential impact of tariffs.
Jefferies also adjusted its price target for Traeger, reducing it to $2.25 from $2.75 while maintaining a Hold rating. The company’s Consumables segment showed a notable recovery, bolstered by a new distribution deal with Walmart (NYSE:WMT), although the Accessories division faced challenges. Traeger’s management has emphasized a cautious approach due to market uncertainties, including potential tariff impacts and international revenue declines. The company is actively working on supply chain diversification and strategic partnerships to navigate these challenges and capture market share.
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