Good day, everyone,
We are continuing coverage of ToughBuilt Industries, Inc. (NASDAQ: TBLT)
Current price $1.48/share
TBLT shares opened, and closed, at $1.48/share in Tuesday’s session. The shares traded in a narrow range of $1.44-$1.52 per share. Traded volume was higher than average at 5.8 million shares.
ToughBuilt is a fast-growing company operating in a massive sector.
Expanding revenues
Expanding product line
Expanding distribution channels
Beating analyst’s estimates
Earlier we mentioned that Maxim Group (An analyst that covers TBLT) issued a report on November 10, 2020, after the release of the Q320 earnings report. This was the headline on that report:
Raising Estimates and PT to $2.50, from $2, as 3Q Beats Across the Board; We See Multiple Growth Catalysts – Reiterate Buy
If you get a chance, read the analysis as a part of your due diligence. TBLT beat the Q320 revenue estimate by 176%. The estimate was $6M and the actual results were $16.6M.
The Maxim analysis stated “We also highlight 3Q20 GAAP gross margin of 45.3%, up 1,440bps y/y, which also significantly exceeded our estimate of 32.2% and benefited from operational efficiencies related to enhanced manufacturing production processes\ and less discounting on product pricing. The significant beat on revenue and gross margin resulted in 3Q20 positive adjusted EBITDA of $0.7M, which improved q/q and y/y, and significantly beat our estimate for a loss of ($2.3M).”
The Maxim analysis estimates Q420 revenues at $14.5M and FYE 2020 revenues will be $41.9M. They have also estimated FYE 2021 revenue at $61.2M. The Maxim analysis further stated “TBLT currently trades at 0.6x and 0.4x our increased 2020 and 2021 revenue estimates, respectively. Our new price target of $2.50 is based on ~1.5x (unchanged) our increased 2021 revenue estimate of $61.2M, which represents over 200% upside to the current share price.”
In November, the company added hand tools including shears, knives, and aviation snips to its product line at all Lowes stores nationwide as well as Lowes.com.
As part of your due diligence, we urge you to read the product reviews on Amazon. The real test of the TBLT success will be the acceptance of their products by the folks that buy and use them. The reviews are a testament to the future success of ToughBuilt as a brand.
TBLT has potential to penetrate the DIY/construction accessories market in a big way, there is plenty of room for a market share grab. We believe TBLT can build its brand online, competing with many small private enterprises.
On the brick-and-mortar store shelves the competition is mainly the big names such as Dewalt, Milwaukee, Makita and Ryobi, companies with billions in revenues. These brands are ubiquitous in the sector and TBLT has an opportunity to increase its product line in the future to facilitate growth and compete with those brands.
The Team
Updated report TBLT below
Hot Products in a Huge Sector
Good day, everyone,
We are continuing coverage of ToughBuilt Industries, Inc. (NASDAQ: TBLT), a company that makes tool and construction accessories.
Current price $1.48/share
TBLT shares opened at $1.48 in today’s session. In the first hour of trading the company shares hit $1.52, on 1.8M shares traded.
Considerations:
Analysts forecast triple digit revenue gains for FYE 2020 (figures not released yet).
Rapidly growing distribution channels.
Q320 is the first profitable quarter (mrq)
Record performance and still trading 48% under 52-week high.
We reported earlier that Amazon sales for TBLT products reached $7M for FYE 2020 and we would like to look at the progression of those revenues:
Q120 $1.20M
Q220 $1.35M (+12.5% QoQ)
Q320 $2.00M (+48% QoQ)
Q420 $2.40M (+20% QoQ)
We note the largest increase was in Q3, the quarter that followed the first round of stimulus to the American population. We don’t know if there is a correlation between the two events, but if there is, the next round of stimulus payments could boost the company’s Amazon sales in the subsequent quarter.
TBLT products are on the shelf at many retail outlets but the three biggest are Home Depot, with 2,200 outlets in North America, Tractor Supply, with 1,800 retail locations and Lowes, with 2,200 outlets. Just those three (and there are several more) represent 6,200 retail locations carrying TBLT products and each of those companies has an online store as well.
Some product reviews:
“These ToughBuilt knee pads STAY IN PLACE. When you kneel down for the first time and your knees hit the gel, Ohhhhh, it’s like heaven. If you work in a commercial or industrial setting and have spent days kneeling with the cheapo’s you will be happy you sprung for these.”
“The ClipTech System is great. They have an amazing selection of other pouches and accessories that clip on or off as needed. HIGHLY RECOMMENDED!!!”
Sawhorse, “Great, sturdy product. I used them to make a 300+lb hog processing table. Handled the weight, no problem.”
There are thousands of product reviews like these on Amazon.
TBLT is a company experiencing dynamic growth in a huge market sector. The DIY/home improvement market is a $460B sector and a large part of that sector is comprised of the products sold by TBLT.
The Traders News Group
Original report from this week below
High Growth Company ToughBuilt (TBLT)
Good day, everyone,
We are continuing coverage of ToughBuilt Industries, Inc. (NASDAQ: TBLT), a company that designs, develops, manufactures, and distributes home improvement and construction products for the building industry in the United States and internationally.
Current price $1.48/share
Outstanding shares (est.) 61.70M
Shares in float (est.) 38.16M
Revenues (ttm) $31.94M
52-week range $.621 to $2.95/share
We first reported on TBLT on January 25th when the shares were at $1.34. Since then, TBLT shares reached a high of $1.78 (+32%). A couple events have occurred since then that compelled us to cover this stock again.
First, as the company stock chart indicates, the shares have consolidated to a price of $1.48/share. The current share price still exceeds its 50 DMA and 200 DMA of $1.06 and $.89, respectively. The Simple Moving Average is still green at all levels. TBLT shares still look to be trending and moving in a bullish manner.
Secondly, the company has reported their 2020 Amazon sales increased significantly over the prior year, to reach $7.04 million. As we previously reported, the ToughBuilt Store on Amazon has 64 items listed, and all have 4 star or better ratings. Some of the TBLT items on Amazon have over 1,000 reviews.
TBLT is a rapidly growing company. Just look at the YOY revenue growth and the quarterly growth in the first nine months of 2020:
2017 revenues – $14M
2018 revenues – $15M (+7% YOY)
2019 revenues – $19M (+26% YOY)
Q1 2020 revenues – $3.9M
Q2 2020 revenues – $6.8M (+74% QOQ)
Q3 2020 revenues – $16.6M (+144% QOQ)
We have no reason to believe TBLT has slowed its growth levels. In fact, we would not be surprised if the upcoming earnings release reveals a large increase in revenues. TBLT has experienced rapid growth and the level of growth seems to be increasing. The company has popular products, with expanding distribution channels.
The DIY/Construction Accessories sector is a $460 billion dollar colossus. In addition to Amazon, TBLT products are on the shelves at Home Depot, Lowes, Menards, and Tractor Supply. Operating in a $460 billion sector means a lot of competition and many are private companies. Many of the big named tool companies also market their own brand of accessories and compete with TBLT. Companies such as Milwaukee, DeWalt, Carhartt, Makita, Ryobi, and others.
The company could report 2020 FYE results in late March based upon when they reported 2019 FYE results.
TBLT shares are trading at 49% off their 52-weeh high of $2.95/share. On November 10th, 2020, after the release of the Q320 earnings, Maxim Group issued a “buy” rating with a price target of $2.50/share.
We believe TBLT could become a company with revenues in the hundreds of millions sooner than the analysts think. Entering a $460B market with hot products is a recipe for success.
About:
ToughBuilt Industries, Inc. designs, develops, manufactures, and distributes home improvement and construction products for the building industry in the United States and internationally. The company offers tool pouches, tool rigs, tool belts and accessories, tools bags, totes, various storage solutions, and office organizers/bags for laptop/tablet/cellphones, and kneepads. It also provides sawhorses, miter saws, table saws, and roller stands; sawhorse/jobsite tables; and gloves. The company offers its products under the TOUGHBUILT brand name through various home improvement big box stores, professional outlets, and direct marketing to construction companies, Amazon, and trade/wholesale outlets.
Stay tuned for more on TBLT coming soon,
The Traders News Group
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