Is Turning Point Brands (TPB) Pricing Look Stretched After Strong Five Year Share Price Gains

• If you are wondering whether Turning Point Brands at US$103.21 is priced for perfection or still offers value, this article will walk through what the numbers are really saying about the stock.
• The share price has seen mixed moves recently, with a 4.4% decline over the last 7 days, a 2.4% gain over 30 days, and returns of 6.4% decline year to date, alongside an 84.8% one year return, a very large three year gain, and a 141.7% return over five years.
• These swings have kept Turning Point Brands on the radar of investors looking at tobacco and nicotine related names, with market sentiment often shifting quickly in this space. While there is no single headline explaining every move, the recent returns context helps frame how investors are reacting to ongoing developments in the sector and the company’s positioning within it.
• Right now, Turning Point Brands scores 0 out of 6 on our valuation checks. This sets up a closer look at traditional methods like DCFs and multiples, and also points to an even richer way of thinking about value that we will come back to at the end of this article.

Turning Point Brands scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Turning Point Brands Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a business could be worth by projecting its future cash flows and discounting them back to today to reflect risk and the time value of money.

For Turning Point Brands, the model uses a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is about $42 million. Analysts provide an estimate for free cash flow of $73.75 million in 2026, with further annual projections after that extrapolated by Simply Wall St, reaching an estimated $99.51 million in 2035, all in dollars.

Bringing those projected cash flows back to today, the DCF model arrives at an estimated intrinsic value of $88.40 per share. Against the current share price of $103.21, this implies the stock is about 16.8% overvalued based on these assumptions and projections.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Turning Point Brands may be overvalued by 16.8%. Discover 876 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Turning Point Brands.

Approach 2: Turning Point Brands Price vs Earnings

For profitable companies, the P/E ratio is a helpful way to see what investors are willing to pay for each dollar of earnings, which makes it a practical cross check against a DCF model.

In general, higher expected growth and lower perceived risk can support a higher P/E, while slower growth or higher risk usually call for a lower, more conservative multiple. So the question is whether Turning Point Brands current P/E lines up with what you might consider reasonable for a Tobacco stock with its characteristics.

Turning Point Brands trades on a P/E of 32.98x, compared with an industry average of 13.30x and a peer average of 27.84x. Simply Wall St also calculates a proprietary Fair Ratio of 26.08x, which attempts to capture what a more tailored P/E might be given factors such as earnings growth, profit margins, industry, market cap and company specific risks.

This Fair Ratio can be more informative than a simple peer or industry comparison because it adjusts for company level qualities instead of assuming all Tobacco names deserve the same multiple. With the current P/E sitting above the Fair Ratio, the stock screens as overvalued on this metric.

Result: OVERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1447 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Turning Point Brands Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, which are simple stories you create about a company that tie your view of its future revenue, earnings and margins to a financial forecast, a fair value, and then a clear comparison with today’s share price. This helps you decide whether you see Turning Point Brands as an opportunity or as fully priced. All of this happens inside the Narratives tool on Simply Wall St’s Community page, where different investors might, for example, plug in the analysts’ fair value of US$118.75 if they are optimistic about Modern Oral growth, or use a lower fair value if they worry more about regulation, and then see those Narratives update automatically as new news, earnings or guidance arrive.

Do you think there's more to the story for Turning Point Brands? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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