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Hold Tattooed Chef Stock As Meatless Fare Lands in Scores of Stores

Ready or not, the plant-based revolution is in full swing, and Tattooed Chef (NASDAQ:TTCF) is working diligently to get its meat-free products on grocers’ shelves. At the same time, TTCF stock just can’t seem to get off the ground and it’s awfully frustrating.

Information about a Tattooed Chef (TTCF) acai bowl is shown on a phone.
Source: Spyro the Dragon / Shutterstock.com

Just to recap, Tattooed Chef serves up sustainably sourced food products. These include zucchini spirals, riced cauliflower, acai and smoothie bowls, and cauliflower pizza crusts.

Call it a niche market if you’d like. If you’re open-minded and can envision a hyper-growth market for plant-based foods, however, then TTCF stock could represent a ground-floor opportunity.

Granted, Tattooed Chef’s financial results aren’t perfect. Judging by the fast-increasing store count, though, it’s fair to say that Tattooed Chef’s faux-meat foray is just getting started.

A Closer Look at TTCF Stock

Going back to the beginning, Tattooed Chef went public in late 2020.

This took place through a blank-check-company business combination. Specifically, Forum Merger II merged with Ittella International (with those two companies being replaced by Tattooed Chef).

Thus, TTCF stock shares began trading publicly on the Nasdaq Exchange on Oct. 16, 2020. That first day, the stock settled near $25.

Fast-forward exactly one year later – Oct. 16, 2021 – and the Tattooed Chef share price is $17.67. That’s a disappointing 12-month result, no doubt, for the hope-filled early-stage investors.

The good news is that, on a technical level, we can see some patterns emerging.

Over 12 months, TTCF stock bounced off of $16 several times, thereby forming a strong support level.

The stock also got rejected several times when the buyers tried to push it past $25.

So, the share price recently came down to a solid support level, which could be viewed as a buy/hold signal.

Moreover, a revisit of $25 seems inevitable – but only if you believe in the company’s fundamentals, so let’s delve into the details now.

A Mixed Bowl of Results

Why can’t TTCF stock break out of its range-bound prison? Perhaps it’s because Wall Street isn’t impressed with Tattooed Chef’s bottom-line results.

That objection is understandable. In 2021’s second quarter, Tattooed Chef sustained a painful net loss of $53.2 million.

That’s a hard pill to swallow, especially when we compare it to the net income of $1.3 million which Tattooed Chef reported in the prior-year period.

Still, the company should be able to remedy this situation in the near future. For full-year 2021, Tattooed Chef expects to generate revenue of $235 million to $242 million, while keeping capital expenditures to a range of $15 million to $20 million.

Furthermore, the company is modeling gross margin in the range of 16% to 22% for full-year 2021.

Only time will tell, but hopefully Tattooed Chef will be able to appease Wall Street by improving its bottom line.

More Bowls in More Stores

Depending on where you’re located, there’s a pretty good chance that you live near a Publix supermarket, or at least know someone who does.

Publix happens to be one of the largest food retailers in the U.S., and getting one’s products onto Publix’s shelves is a major coup.

Therefore, both plant-based food aficionados and TTCF stock holders should be thrilled to learn that six Tattooed Chef products are now available in approximately 1,200 Publix locations.

Interestingly, all six of the entrées are bowls. If you happen to be near a Publix supermarket, you can find them in the frozen foods section, starting at $4.99 per bowl.

Tattooed Chef President and CEO Sam Galletti proudly observed that, with the addition of Publix, Tattooed Chef’s products are now available in more than 13,000 stores nationwide.

With that, Galletti assured that his company is “successfully executing on our strategy to grow distribution, increase brand awareness, and continuously innovate our product offerings.”

The Bottom Line

Indeed, Tattooed Chef is “successfully executing” – yet, Wall Street doesn’t seem to care.

What the investors want to see is not just more bowls in more stores, but positive net earnings.

Give it some time, as Tattooed Chef should achieve this objective in the upcoming quarters.

In the meantime, feel free to hold some TTCF stock shares as a revisit of $25 could happen very soon.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2021/10/hold-ttcf-stock-as-meatless-fare-lands-in-scores-of-stores/.

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