This is not financial advice and my brain is as smooth as a hardboiled egg. I currently have no position in this company.
11/15 EDIT: Earnings have been rescheduled for 11/16 after hours. See comments for a link to TTCF investor relation document. I have taken a small position in $16 and $15 puts for 11/19 expiration
Ticker was mentioned a few times in discord so I thought I’d do some quick research on it and see if there’s any potential for an earnings play. I’m sorry that this isn’t super in-depth but I wanted to at least get an overview and pros/cons list out there and spark discussion. Where I could really use help is in the nitty-gritty financial stuff. It’s really not my forte.
TTCF (The Tattooed Chef) were originally scheduled to report their earnings on 11/10 but announced that they will be rescheduling because they need more time to finalize the company’s financial statements. They haven’t given an updated date/time yet.
For those unfamiliar with the company:
“Tattooed Chef is a leading plant-based food company offering a broad portfolio of innovative plant-based food products that taste great and are sustainably sourced. Tattooed Chef’s signature products include ready-to-cook bowls, zucchini spirals, riced cauliflower, acai and smoothie bowls, and cauliflower pizza crusts, which are available in the frozen food sections of leading national retail food stores across the United States.”
- High revenue growth (up 75% from last year)
- Low debt (0.01 debt to equity ratio)
- Focused on expansion which “will enable scalability and then profitability”.
- Plant-based foods are becoming more popular for a variety of factors (rising popularity of vegetarian/vegan diets, concern for climate change, prices of “health food” coming in line with conventional foods)
- Favorable long-term outlook from most analysts.
- Extremely low profitability (0.69% Return on Assets, 0.90% profit margin, 0.84% Return on Equity).
- High operating expenses which have been increasing YoY.
- Increasingly negative operating income.
- Nothing especially unique in terms of product. They recently launched an online store but kind of shockingly haven’t tried to break into the delivery/subscription space.
- Their website traffic has been in a steady decline since mid-2021. According to similarweb.com, <1% of their site’s traffic comes from social media and display advertising. Almost all traffic is from direct search and their “audience interests” are (tellingly, perhaps): Finance & Investing.
- Supply chain issues and increased costs of goods, labor, and shipping on both ends of the product.
- Recently announced plans to acquire Belmont Confections for 18M by end of Q4. So, another big expense on the horizon, even though it may open new doors down the road.
- Bearish short-term outlook from analysts.
Some financial data folks might find interesting:
Some similar companies earnings results:
- BYND: missed earnings -0.87 EPS (actual) vs. -.39(expected) and dropped 18% in AH trading
- APRN: missed earnings -1.17 EPS vs. -.58 and dropped 13% in PM trading.
I think there’s enough short-term downside for this company to play puts on earnings (whenever we get the new date…). I’m feeling more bearish after seeing how Beyond and Blue Apron fared this week. Doesn’t seem like TTCF has done anything to immunize themselves against the same issues that are plaguing similar companies.
Curious to hear others’ perspectives. Any and all feedback would be much appreciated.
Echoing things I heard from Kryptek, usually when companies have to reschedule their ER, its a bearish sign. You can see this with PRPL. Just from that alone, I am inclined to get puts as well. Thanks for the dd as well.
Any ideas on good options positions to enter or is it too early to tell since earnings isn’t announced
The company was never that profitable to begin with and their EPS has always been too high for their current market cap. I’d wait for a new date (should be soon) and take a position.
They dropped a lot because of Bynd, but probably more room to go
Yeah I am wondering if most of the drop will be priced in before earnings.
Like what we recently saw with Wish, it’s very likely it’ll track down in anticipation of bad earnings. With Wish, I took my positions incredibly early and by close the day before the report was to drop I was up 200% with IV and price movement. I think if you’re taking puts on these type of plays, it may not be a bad idea to ease into a position early and average up as you head into the earnings call.
I do wonder what the other reasons for a delay could be. The examples I can think of, similar to @Kryptek are bearish. Wonder if there is really ever a bullish reason for them?
Irregardless, definitely does sound like a solid bear case for their earnings.
I haven’t eaten meat in over a decade so I know a little bit about the meat alternative market and while it’s a personal opinion I can say with confidence that tattooed chef is the lowest of the low when it comes to vegan and vegetarian meals. The food they make is tasteless and cheap it’s miles behind the competition from meat alternatives like Gardein and Morning Star who make amazing food.
But on less personal opinions here is some search data.
As you can see it’s looking grim for them. The competition is getting better and according to internet traffic the public interest in them is tanking. In Q2 they had 50 million in revenue which missed the estimate of 54 million. This quarter the estimate is 64 million and I find it hard to believe they can even go higher than they did in Q2.
According to RH and Yahoo Finance the new earnings date will be 11/15, but I haven’t seen confirmation that with TTCF’s IR site just yet.
RH now says 11/23 AH for earnings. Yahoo still says 11/15, so it’s anybody’s guess at the moment.
Stock is dumping today and I think this morning entry just below $17 would have been ideal but I didn’t pull the trigger. If we see retracement back toward 16.50-17.00 I will likely take a small put position.
Put-Call ratio is 1.11 according to barchart.com
Saw this today, I’ll be checking my local walmart and costco to see if TTCF products are available
I have only ever found them at Target they aren’t at Kroger’s or Walmart.
walmart/sams is their biggest customer that accounts for 80 something % of their revenue according to what I’ve read. If walmart isn’t stocking it for whatever reason it’s very bad for them.
If the above is true, it’s bear time. From their last 10K:
Backing this up, my wife reminded me that TTCF made the product we recently purchased from Sams Club for $0.50. It was originally $12.99, marked down to $4.50 and scanned for $0.50. Seems like they’re axing the brand across all Walmart associated stores.
My wife frequents a lot of related communities on Reddit and has said (mirroring @Rpgeek) that the consensus is that the food is rather tasteless and most end up migrating back to other more established vegan/vegetarian brands as a result.
Looked up the filing deadline. They are required to file their 10-Q by Monday, or they need to file NT 10-Q for an extension by Monday, which would give them until next Monday (11/22) to file the actual 10-Q. I would expect either of those to be bearish. Either way, as long as they don’t do a PM release, FD puts might be good to buy Monday and then sell Tuesday.
I agree with this. The only thing I can see happening that would turn this upside down would be them getting acquired.
couldn’t find any TTCF stuff at walmart, I’m not sure if the store here ever had them.
So I think my plan is to buy some 15p 12/17 (or maybe 11/23 expiration) on Monday unless it’s a blood red day. If price tracks back up to 16.50 or 17.00 I’m definitely going in.
Someone tell me if this is a shit idea.
this is my plan as well. hoping for a green day on monday and make a small position then
Maybe they are having to revise their earnings forward statements to mention the loss of Walmart/Sams and that was a huge revenue stream. Perhaps they are even considering filing for bankruptcy or MAJORLY scaling back (i.e. layoffs) since their 3 largest customers were 88% of revenue?
Talk about putting all your eggs into one basket.
Only saving grace would be like if they were magically a hit with like retirement homes or something (because someone said it is so bland), but I think their prices are way too high for them to afford their products. lol.