We assign a fundamental rating of 4 out of 10 to TWNK. TWNK was compared to 87 industry peers in the Food Products industry. Both the profitability and the financial health of TWNK get a neutral evaluation. Nothing too spectacular is happening here. While showing a medium growth rate, TWNK is valued expensive at the moment.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year TWNK was profitable.
In the past year TWNK had a positive cash flow from operations.

1.2 Ratios

TWNK's Return On Assets of 4.83% is fine compared to the rest of the industry. TWNK outperforms 63.44% of its industry peers.
TWNK has a better Return On Equity (9.18%) than 64.52% of its industry peers.
TWNK's Return On Invested Capital of 5.38% is fine compared to the rest of the industry. TWNK outperforms 63.44% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TWNK is significantly below the industry average of 27.79%.
The last Return On Invested Capital (5.38%) for TWNK is above the 3 year average (4.37%), which is a sign of increasing profitability.

		Industry Rank	Sector 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%

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.
TWNK's Gross Margin of 34.99% is amongst the best of the industry. TWNK outperforms 87.10% of its industry peers.
In the last couple of years the Gross Margin of TWNK has declined.

		Industry Rank	Sector 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%

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ROA

ROE

ROIC

Operating and Profit Margin

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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
TWNK has a better debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 2.54 indicates that TWNK is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.54, TWNK perfoms like the industry average, outperforming 58.06% of the companies in the same 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.
The Debt to Equity ratio of TWNK (0.53) is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Debt/Equity	0.53
Debt/FCF	9.63
Altman-Z	2.54

ROIC/WACC0.68

WACC7.88%

2.3 Liquidity

A Current Ratio of 1.80 indicates that TWNK should not have too much problems paying its short term obligations.
The Current ratio of TWNK (1.80) 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.
TWNK has a better Quick ratio (1.47) than 74.19% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.8
Quick Ratio	1.47

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WACC

Debt/Equity

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Altman-Z score

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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.
The Revenue has grown by 10.00% in the past year. This is quite good.
Measured over the past years, TWNK shows a quite strong growth in Revenue. The Revenue has been growing by 11.84% on average per year.

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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 32.02, TWNK can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as TWNK.
TWNK's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.32.
Based on the Price/Forward Earnings ratio of 26.64, the valuation of TWNK can be described as expensive.
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 (25.57), we can say TWNK is valued inline with the index average.

		Industry Rank	Sector Rank
PE	32.02
Fwd PE	26.64

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.