Turning Point Brands, Inc. (TPB): A Bull Case Theory

We came across a bullish thesis on Turning Point Brands, Inc. on Valueinvestorsclub.com by alcideholder. In this article, we will summarize the bulls’ thesis on TPB. Turning Point Brands, Inc.'s share was trading at $124.49 as of January 28th. TPB’s trailing and forward P/E were 37.61 and 26.39 respectively according to Yahoo Finance.

Turning Point Brands, Inc., together with its subsidiaries, manufactures, markets, and distributes branded nicotine products in the United States and Canada. TPB has evolved from a historically modest-growth, undervalued consumer goods company into a high-growth player in the nicotine pouch market, following the nationwide launch of its FRE product in Q1 2024 and the introduction of ALP through a 50/50 joint venture with Tucker Carlson in Q4 2025. TPB now leads the market in nicotine pouch exposure, with the segment accounting for 26% of total sales and exhibiting rapid adoption across retail and direct-to-consumer channels.

FRE and ALP have demonstrated strong retail traction, with FRE in 14,000 stores and ALP already achieving $200 per store per week in early retail, while online subscription sales provide high-margin, recurring revenue. The company is nearshoring production to Louisville, Kentucky, reducing costs from $1.30 to $0.60 per can and potentially adding $33 million in annual EBITDA, which is largely unrecognized in consensus estimates. TPB’s legacy business, including Zig-Zag and Stoker’s, remains profitable and provides stability while the nicotine pouch segment scales. The market appears to underestimate growth potential, as scanner data shows sustained quarter-over-quarter gains despite conservative sell-side forecasts.

With a projected pouch market size of $10–20 billion by 2030, TPB could achieve double-digit market share, supporting a five-year price target of $480–$860 per share, even under conservative assumptions. Catalysts include further retail rollout of ALP, domestic production cost savings, and regulatory approvals through the PMTA process. Risks include regulatory scrutiny, youth usage restrictions, competitive pressures, and operational execution challenges. Despite these, TPB offers asymmetric upside, high margins, and strong brand loyalty, presenting a compelling growth opportunity in a rapidly expanding consumer category.

Previously we covered a bullish thesis on British American Tobacco p.l.c. (BTI) by Brian Coughlin in April 2025, which highlighted the company’s rapid expansion in the nicotine pouch market through Velo and Velo Plus, strong U.S. volume growth, attractive valuation, and a well-covered dividend. The company's stock price has appreciated approximately by 43.82% since our coverage. alcideholder shares a similar perspective but emphasizes Turning Point Brands’ (TPB) FRE and ALP launches, nearshoring cost savings, and high-margin direct-to-consumer sales, highlighting TPB’s growth potential.

Turning Point Brands, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held TPB at the end of the third quarter which was 35 in the previous quarter. While we acknowledge the risk and potential of TPB as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TPB and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.