Traeger’s Q1 Results Well Done, but Key Metrics Remain Undercooked

Cooking systems producer Traeger, Inc. (NYSE: COOK) recently posted stronger-than-expected results for the first quarter ended March 31, 2022.

Following the results, shares of the company rose almost 10% to close at $4.85 in Wednesday’s extended trading session. The stock was down more than 13% during the normal trading hours.

Revenue & Earnings

Revenues for the quarter declined 5% year-over-year to $223.7 million but surpassed the consensus estimate of $210.1 million.

Similarly, earnings of $0.17 per share declined 58.5% year-over-year but surpassed the consensus estimate of $0.09 per share.

Other Operating Metrics

During the quarter, adjusted EBITDA of $30.9 million registered a decline of 51.8% from the same quarter last year.

Further, the company’s liquidity position also looks a bit shaky. Its cash and cash equivalents dropped from $16.7 million at the end of 2021 to $11.1 million at the end of this quarter.

Outlook

For 2022, Traeger forecasts revenue to be in the range of $800 million to $850 million. The consensus estimate for the same is pegged at $823.9 million.

Management Commentary

The CEO of Traeger, Jeremy Andrus, said, “During the first quarter, we continued to execute on our strategic growth pillars. We successfully introduced our new platform of innovation with the launch of our new Timberline and Timberline XL grills. In addition, we expanded our assortment in 350 doors with one of our largest retail partners. In consumables, we expanded our offering of rubs and sauces in over 2,200 doors at Kroger and further expanded grocery door growth for our pellets as well.”

Stock Rating

The Wall Street community is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on six Buys and three Holds. COOK’s average price target of $11.06 implies that the stock has upside potential of 150.8% from current levels. Shares have declined 80% over the past year.

Positive Sentiments

Overall, the TipRanks’ Hedge Fund Trading Activity tool shows that hedge fund confidence in Traeger is currently Very Positive. Moreover, the cumulative change in holdings across all three hedge funds that were active in the last quarter was an increase of 276,500 shares.

Conclusion

Trager’s quarterly results exceeded expectations despite witnessing a year-over-year decline in key metrics. Further, the company’s upbeat revenue outlook for the year is likely to make the stock an attractive choice for investors.

Discover new investment ideas with data you can trust.

Related News:
Philip Morris Will Acquire Swedish Match AB for $16B
Market Volatility Continues to Haunt Coinbase
Apple to Discontinue One of Its Iconic Products