Why TreeHouse Foods Stock Tumbled to Multi-Year Lows

Year-over-year, THS is down more than 41%

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TreeHouse Foods Inc. (NYSE:THS) is down 5.2% $31.01 at last check, after the food packaging name announced it will not put itself up for sale. The company also reaffirmed its 2022 guidance, noting it is still exploring divestiture transactions, including the sale of parts of its meal preparation business.

The security earlier today pulled back to a roughly 11-year low of $29.47, after the $43 level rejected THS' late February rally. The shares have also breached a familiar floor at the $33 area, which contained pullbacks in August and November. Year-over-year, THS is down 41.1%.

THS Intraday

TreeHouse Foods stock offers a solid price-sales ratio of 0.52, but an inflated forward price-earnings of 21.79. THS is also estimated to see a 0.7% increase in revenues and a 94% increase in earnings next year, which would result in a more balanced valuation for the equity.

However, THS' overall fundamentals are considerably weak, due to declining revenues and inconsistent net income growth. Since 2018, the company’s revenues have fallen 26%. TreeHouse Foods' net income has also decreased by $26.3 million since 2020, with the company reporting $12.5 million in net losses for 2021.

Furthermore, TreeHouse Foods holds $2.09 billion in total debt on its balance sheet, and only $308.6 million in cash. This signals little long-term security for an already declining business.

 

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