Treehouse Foods Inc (THS, Financial) has recently demonstrated a notable performance in the stock market, with a significant uptick in its share price. Over the past week, the company's stock has gained 3.92%, and over the last three months, it has surged by an impressive 17.17%. Currently, Treehouse Foods boasts a market capitalization of $2.2 billion. According to GuruFocus, the stock is fairly valued at $42.63, a slight increase from its previous valuation of $42.25, which was considered modestly undervalued.
Overview of Treehouse Foods Inc
Treehouse Foods Inc, operating within the consumer packaged goods industry, stands as the largest pure-play private-label manufacturer in the United States. The company has honed its focus on high-growth categories such as snacks, beverages, and select grocery products following strategic divestitures post its significant acquisition of Ralcorp in 2016. Treehouse Foods primarily serves retail grocery stores, offering products under private labels, alongside smaller distribution channels including co-manufacturing and food away from home.
Assessing Profitability
Treehouse Foods holds a Profitability Rank of 5/10, indicating average profitability within its sector. The company's Operating Margin stands at 3.22%, which is better than 38.68% of its peers. Despite a negative Return on Equity (ROE) of -0.84% and Return on Assets (ROA) of -0.33%, these figures still rank better than 23.2% and 26.56% of industry counterparts, respectively. The Return on Invested Capital (ROIC) is 3.34%, surpassing 41.41% of competitors. Over the past decade, Treehouse Foods has been profitable for four years, outperforming 19.32% of companies in its industry.
Growth Prospects
The Growth Rank of Treehouse Foods is 4/10, reflecting moderate growth potential. The company has experienced a 3-year and 5-year revenue decline per share of -7.40%, yet this performance is still better than 14.08% and 12.07% of companies, respectively. Looking ahead, the estimated revenue growth rate for the next 3 to 5 years is 2.98%, which is more favorable than 19.07% of companies. The EPS growth rates also show mixed results, with a 3-year growth rate of 10.70% and a 5-year decline of -3.70%.
Significant Shareholders
Jana Partners (Trades, Portfolio) is a major holder in Treehouse Foods, possessing 4,910,950 shares, which accounts for 9.46% of the company's stock. Other notable holders include Steven Scruggs (Trades, Portfolio) and Renaissance Technologies (Trades, Portfolio), holding smaller percentages of shares.
Competitive Landscape
Treehouse Foods competes with several companies in the consumer packaged goods sector. Central Garden & Pet Co (CENT, Financial) has a market cap of $2.39 billion, slightly higher than Treehouse. WK Kellogg Co (KLG, Financial) and Utz Brands Inc (UTZ, Financial) have market caps of $1.53 billion and $1.41 billion, respectively, positioning Treehouse Foods competitively within its market segment.
Conclusion
Treehouse Foods Inc exhibits a stable market performance with a recent uptick in stock price and fair valuation as per the GF Value. The company's profitability and growth metrics provide a mixed but cautiously optimistic outlook. When compared with its competitors, Treehouse Foods holds its ground as a significant player in the consumer packaged goods industry, maintaining a competitive stance amidst varying market caps and growth rates.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
