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HOSTESS BRANDS INC (TWNK) Stock Fundamental Analysis

NASDAQ:TWNK - Nasdaq - US44109J1060 - Common Stock - Currency: USD

33.3  -0.05 (-0.15%)

After market: 33.34 +0.04 (+0.12%)

Fundamental Rating

5

Overall TWNK gets a fundamental rating of 5 out of 10. We evaluated TWNK against 91 industry peers in the Food Products industry. While TWNK has a great profitability rating, 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

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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.
TWNK had positive earnings in each of the past 5 years.
In the past 5 years TWNK always reported a positive cash flow from operatings.
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

Looking at the Return On Assets, with a value of 4.83%, TWNK is in the better half of the industry, outperforming 63.44% of the companies in the same industry.
TWNK's Return On Equity of 9.18% is fine compared to the rest of the industry. TWNK outperforms 64.52% of its industry peers.
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.
Measured over the past 3 years, the Average Return On Invested Capital for TWNK is below the industry average of 9.02%.
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 better Profit Margin (12.28%) than 90.32% of its industry peers.
TWNK's Profit Margin has declined in the last couple of years.
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.
TWNK's Operating Margin has declined in the last couple of years.
The Gross Margin of TWNK (34.99%) is better than 87.10% of its industry peers.
TWNK's Gross Margin has declined in the last couple of years.
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

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5

2. Health

2.1 Basic Checks

TWNK has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, TWNK has less shares outstanding
Compared to 1 year ago, TWNK has an improved debt to assets ratio.
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.
The Altman-Z score of TWNK (2.54) is comparable to the rest of the industry.
The Debt to FCF ratio of TWNK is 9.63, which is on the high side as it means it would take TWNK, 9.63 years of fcf income to pay off 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.
A Debt/Equity ratio of 0.53 indicates that TWNK is somewhat dependend on debt financing.
TWNK has a Debt to Equity ratio (0.53) which is comparable to the rest of the 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 (1.80) which is comparable to the rest of the industry.
A Quick Ratio of 1.47 indicates that TWNK should not have too much problems paying 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

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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.
TWNK shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.36% yearly.
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

The Earnings Per Share is expected to grow by 8.80% on average over the next years. This is quite good.
Based on estimates for the next years, TWNK will show a small growth in Revenue. The Revenue will grow by 4.32% on average per year.
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

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 0.5 1

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3

4. Valuation

4.1 Price/Earnings Ratio

TWNK is valuated quite expensively with a Price/Earnings ratio of 32.02.
The rest of the industry has a similar Price/Earnings ratio as TWNK.
Compared to an average S&P500 Price/Earnings ratio of 29.63, TWNK is valued at the same level.
With a Price/Forward Earnings ratio of 26.64, TWNK can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TWNK is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of TWNK to the average of the S&P500 Index (22.68), we can say TWNK is valued inline with the index average.
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

TWNK's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TWNK is on the same level as its industry peers.
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

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

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0

5. Dividend

5.1 Amount

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

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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%