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Turning Point Brands, Inc. (NYSE:TPB), a manufacturer of tobacco products with a market capitalization of $1.1 billion and a perfect Piotroski Score of 9 according to InvestingPro, has entered into an at-the-market sales agreement with B. Riley Securities, Inc. and Barclays (LON:BARC) Capital Inc. to offer and sell up to $100 million of its common stock.
The agreement, effective today, allows the company to sell shares from time to time through the sales agents in transactions on the New York Stock Exchange or other existing trading markets, over-the-counter, in privately negotiated transactions, or by any other legally permissible means.
The sales agents are entitled to a commission of up to 3% of the gross sales price of any shares sold under this agreement. The shares offered will be issued under Turning Point Brands' existing shelf registration statement and a related prospectus supplement filed with the Securities and Exchange Commission.
The Louisville, Kentucky-based company intends to use the net proceeds from this at-the-market offering for general corporate purposes. With a strong current ratio of 4.21 and operating with moderate debt levels, these funds will support accelerating the national rollout and expanding the manufacturing of its white nicotine pouch brand FRE and supporting its joint venture, ALP Supply Co, LLC. InvestingPro analysis reveals 11 additional key insights about TPB's financial position and growth prospects.
This report contains forward-looking statements, and actual results could differ materially due to various risks and uncertainties. However, the company has demonstrated strong performance with a 138.64% year-to-date return and maintains a "GREAT" financial health score according to InvestingPro's comprehensive analysis. Turning Point Brands has no obligation to update any forward-looking statements made in this report.
The at-the-market offering is subject to market conditions, and there can be no assurance as to whether or when the company may sell shares or as to the actual size or terms of the offering. This report does not constitute an offer to sell or a solicitation of an offer to buy any securities.
In other recent news, Turning Point Brands delivered robust financial performance in Q3 2024, with adjusted EBITDA rising 11% to $27.2 million. The company's popular Zig-Zag and Stoker's brands reported revenue increases of 6% and 12% respectively, contributing to total Q3 sales of $105.6 million. Turning Point Brands has also raised its full-year 2024 adjusted EBITDA guidance to between $101 million and $103 million, reflecting confidence in its ongoing business strategies.
Craig-Hallum maintained a Buy rating on Turning Point Brands, raising the price target to $75, indicating a positive outlook on the company's nicotine pouch market potential. This is based on the company's impressive financial strength, including a current EBITDA of $97.5 million and a P/E ratio of 22.9x.
Oppenheimer assigned an Outperform rating to Turning Point Brands, citing the company's strong portfolio and potential for growth. The company's strategic pivot away from mergers and acquisitions has positioned it as a mid-single-digit percentage topline grower, generating strong cash flow.
Turning Point Brands announced plans for new product launches and market expansions in 2025, along with a $100 million share repurchase program. Additionally, the firm's FRE brand reported significant growth, with sales increasing by 342% to roughly $5 million.
These recent developments, coupled with a strong liquidity position of over $33 million in cash, underscore a positive outlook for the company's future.
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