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HOSTESS BRANDS INC (TWNK) Stock Fundamental Analysis

USA - NASDAQ:TWNK - US44109J1060 - Common Stock

33.3 USD
-0.05 (-0.15%)
Last: 11/6/2023, 8:00:01 PM
33.34 USD
+0.04 (+0.12%)
After Hours: 11/6/2023, 8:00:01 PM
Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to TWNK. TWNK was compared to 89 industry peers in the Food Products industry. TWNK has an excellent profitability rating, but there are some minor concerns on its financial health. While showing a medium growth rate, TWNK is valued expensive at the moment.


Dividend Valuation Growth Profitability Health

7

1. Profitability

1.1 Basic Checks

In the past year TWNK was profitable.
TWNK had a positive operating cash flow in the past year.
Each year in the past 5 years TWNK has been profitable.
TWNK had a positive operating cash flow in each of the past 5 years.
TWNK Yearly Net Income VS EBIT VS OCF VS FCFTWNK Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 50M 100M 150M 200M

1.2 Ratios

TWNK has a Return On Assets of 4.83%. This is in the better half of the industry: TWNK outperforms 63.44% of its industry peers.
Looking at the Return On Equity, with a value of 9.18%, TWNK is in the better half of the industry, outperforming 64.52% of the companies in the same industry.
TWNK has a Return On Invested Capital of 5.38%. This is in the better half of the industry: TWNK outperforms 63.44% of its industry peers.
TWNK had an Average Return On Invested Capital over the past 3 years of 4.37%. This is significantly below the industry average of 28.31%.
The 3 year average ROIC (4.37%) for TWNK is below the current ROIC(5.38%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 4.83%
ROE 9.18%
ROIC 5.38%
ROA(3y)3.36%
ROA(5y)2.84%
ROE(3y)6.69%
ROE(5y)5.91%
ROIC(3y)4.37%
ROIC(5y)3.94%
TWNK Yearly ROA, ROE, ROICTWNK Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 0 10 -10 20

1.3 Margins

TWNK has a Profit Margin of 12.28%. This is amongst the best in the industry. TWNK outperforms 90.32% of its industry peers.
In the last couple of years the Profit Margin of TWNK has declined.
Looking at the Operating Margin, with a value of 16.91%, TWNK belongs to the top of the industry, outperforming 94.62% of the companies in the same industry.
In the last couple of years the Operating Margin of TWNK has declined.
Looking at the Gross Margin, with a value of 34.99%, TWNK belongs to the top of the industry, outperforming 87.10% of the companies in the same industry.
In the last couple of years the Gross Margin of TWNK has declined.
Industry RankSector Rank
OM 16.91%
PM (TTM) 12.28%
GM 34.99%
OM growth 3Y3.8%
OM growth 5Y-7.44%
PM growth 3Y20.25%
PM growth 5Y-15.96%
GM growth 3Y1.25%
GM growth 5Y-4.03%
TWNK Yearly Profit, Operating, Gross MarginsTWNK Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 10 20 30 40

5

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so TWNK is destroying value.
Compared to 1 year ago, TWNK has less shares outstanding
TWNK has a better debt/assets ratio than last year.
TWNK Yearly Shares OutstandingTWNK Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 20M 40M 60M 80M 100M
TWNK Yearly Total Debt VS Total AssetsTWNK Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 1B 2B 3B

2.2 Solvency

TWNK has an Altman-Z score of 2.54. This is not the best score and indicates that TWNK is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.54, TWNK is in line with its industry, outperforming 58.06% of the companies in the same industry.
TWNK has a debt to FCF ratio of 9.63. This is a negative value and a sign of low solvency as TWNK would need 9.63 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 9.63, TWNK is in the better half of the industry, outperforming 63.44% of the companies in the same industry.
TWNK has a Debt/Equity ratio of 0.53. This is a neutral value indicating TWNK is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.53, TWNK is in line with its industry, outperforming 48.39% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.53
Debt/FCF 9.63
Altman-Z 2.54
ROIC/WACC0.68
WACC7.88%
TWNK Yearly LT Debt VS Equity VS FCFTWNK Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 0 500M -500M 1B 1.5B

2.3 Liquidity

TWNK has a Current Ratio of 1.80. This is a normal value and indicates that TWNK is financially healthy and should not expect problems in meeting its short term obligations.
TWNK has a Current ratio of 1.80. This is comparable to the rest of the industry: TWNK outperforms 54.84% of its industry peers.
TWNK has a Quick Ratio of 1.47. This is a normal value and indicates that TWNK is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.47, TWNK is in the better half of the industry, outperforming 74.19% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.8
Quick Ratio 1.47
TWNK Yearly Current Assets VS Current LiabilitesTWNK Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 100M 200M 300M 400M

5

3. Growth

3.1 Past

TWNK shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.47%, which is quite good.
Measured over the past 5 years, TWNK shows a small growth in Earnings Per Share. The EPS has been growing by 7.36% on average per year.
Looking at the last year, TWNK shows a quite strong growth in Revenue. The Revenue has grown by 10.00% in the last year.
TWNK shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.84% yearly.
EPS 1Y (TTM)9.47%
EPS 3Y17.37%
EPS 5Y7.36%
EPS Q2Q%27.27%
Revenue 1Y (TTM)10%
Revenue growth 3Y14.38%
Revenue growth 5Y11.84%
Sales Q2Q%3.49%

3.2 Future

TWNK is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.80% yearly.
The Revenue is expected to grow by 4.32% on average over the next years.
EPS Next Y18%
EPS Next 2Y13.51%
EPS Next 3Y11.36%
EPS Next 5Y8.8%
Revenue Next Year5.6%
Revenue Next 2Y5.07%
Revenue Next 3Y4.87%
Revenue Next 5Y4.32%

3.3 Evolution

The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
TWNK Yearly Revenue VS EstimatesTWNK Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 500M 1B 1.5B
TWNK Yearly EPS VS EstimatesTWNK Yearly EPS VS EstimatesYearly EPS VS Estimates 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 0.5 1

3

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 32.02, which means the current valuation is very expensive for TWNK.
Compared to the rest of the industry, the Price/Earnings ratio of TWNK is on the same level as its industry peers.
TWNK is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.38, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 26.64, TWNK can be considered very expensive at the moment.
TWNK's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.86, TWNK is valued at the same level.
Industry RankSector Rank
PE 32.02
Fwd PE 26.64
TWNK Price Earnings VS Forward Price EarningsTWNK Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as TWNK.
The rest of the industry has a similar Price/Free Cash Flow ratio as TWNK.
Industry RankSector Rank
P/FCF 42.86
EV/EBITDA 17.97
TWNK Per share dataTWNK EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 -5 10

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
TWNK has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.78
PEG (5Y)4.35
EPS Next 2Y13.51%
EPS Next 3Y11.36%

0

5. Dividend

5.1 Amount

TWNK does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

HOSTESS BRANDS INC

NASDAQ:TWNK (11/6/2023, 8:00:01 PM)

After market: 33.34 +0.04 (+0.12%)

33.3

-0.05 (-0.15%)

Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)11-07 2023-11-07/bmo
Earnings (Next)02-19 2024-02-19/amc
Inst Owners0%
Inst Owner Change0%
Ins Owners19.27%
Ins Owner Change0%
Market Cap4.42B
Analysts70
Price Target34.74 (4.32%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.59%
Min EPS beat(2)2.05%
Max EPS beat(2)5.14%
EPS beat(4)4
Avg EPS beat(4)3.97%
Min EPS beat(4)1.05%
Max EPS beat(4)7.63%
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)-1.77%
Min Revenue beat(2)-3.6%
Max Revenue beat(2)0.06%
Revenue beat(4)3
Avg Revenue beat(4)0.55%
Min Revenue beat(4)-3.6%
Max Revenue beat(4)5.27%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0.74%
PT rev (3m)16.56%
EPS NQ rev (1m)0.48%
EPS NQ rev (3m)-0.04%
EPS NY rev (1m)0%
EPS NY rev (3m)0.88%
Revenue NQ rev (1m)-0.87%
Revenue NQ rev (3m)-1.66%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.62%
Valuation
Industry RankSector Rank
PE 32.02
Fwd PE 26.64
P/S 3.2
P/FCF 42.86
P/OCF 17.7
P/B 2.39
P/tB N/A
EV/EBITDA 17.97
EPS(TTM)1.04
EY3.12%
EPS(NY)1.25
Fwd EY3.75%
FCF(TTM)0.78
FCFY2.33%
OCF(TTM)1.88
OCFY5.65%
SpS10.41
BVpS13.94
TBVpS-5.91
PEG (NY)1.78
PEG (5Y)4.35
Profitability
Industry RankSector Rank
ROA 4.83%
ROE 9.18%
ROCE 7.06%
ROIC 5.38%
ROICexc 5.54%
ROICexgc 30.86%
OM 16.91%
PM (TTM) 12.28%
GM 34.99%
FCFM 7.46%
ROA(3y)3.36%
ROA(5y)2.84%
ROE(3y)6.69%
ROE(5y)5.91%
ROIC(3y)4.37%
ROIC(5y)3.94%
ROICexc(3y)4.63%
ROICexc(5y)4.2%
ROICexgc(3y)35.07%
ROICexgc(5y)36.04%
ROCE(3y)5.74%
ROCE(5y)5.17%
ROICexcg growth 3Y-5.58%
ROICexcg growth 5Y-14.6%
ROICexc growth 3Y12.1%
ROICexc growth 5Y0.38%
OM growth 3Y3.8%
OM growth 5Y-7.44%
PM growth 3Y20.25%
PM growth 5Y-15.96%
GM growth 3Y1.25%
GM growth 5Y-4.03%
F-Score8
Asset Turnover0.39
Health
Industry RankSector Rank
Debt/Equity 0.53
Debt/FCF 9.63
Debt/EBITDA 3.32
Cap/Depr 235.98%
Cap/Sales 10.61%
Interest Coverage 4.78
Cash Conversion 84.43%
Profit Quality 60.75%
Current Ratio 1.8
Quick Ratio 1.47
Altman-Z 2.54
F-Score8
WACC7.88%
ROIC/WACC0.68
Cap/Depr(3y)149.99%
Cap/Depr(5y)132.08%
Cap/Sales(3y)7.02%
Cap/Sales(5y)6.24%
Profit Quality(3y)114.45%
Profit Quality(5y)131.78%
High Growth Momentum
Growth
EPS 1Y (TTM)9.47%
EPS 3Y17.37%
EPS 5Y7.36%
EPS Q2Q%27.27%
EPS Next Y18%
EPS Next 2Y13.51%
EPS Next 3Y11.36%
EPS Next 5Y8.8%
Revenue 1Y (TTM)10%
Revenue growth 3Y14.38%
Revenue growth 5Y11.84%
Sales Q2Q%3.49%
Revenue Next Year5.6%
Revenue Next 2Y5.07%
Revenue Next 3Y4.87%
Revenue Next 5Y4.32%
EBIT growth 1Y12.2%
EBIT growth 3Y18.73%
EBIT growth 5Y3.52%
EBIT Next Year45.07%
EBIT Next 3Y18.06%
EBIT Next 5Y17.33%
FCF growth 1Y-21.87%
FCF growth 3Y4.56%
FCF growth 5Y-1.62%
OCF growth 1Y34.54%
OCF growth 3Y20%
OCF growth 5Y8.73%