ToughBuilt Industries Surges 4.9% Today - Is There Still Upside?

Rocketing to a price of $2.37 during today's morning trading session, shares of ToughBuilt Industries are still -60.5% below their average target price of $6. Could there be more upside potential for the stock? Analysts are giving TBLT an average rating of buy and target prices ranging from $6 to $6 dollars per share.

We can use ToughBuilt Industries's short interest as a proxy for determining general market sentiment regarding the stock. The short interest is the percentage of the share float that represents short positions, meaning that the investor believes the stock will decline in the future. Since TBLT's short interest is 5.2%, the market sentiment is mixed on this stock.

Another possible indicator of market sentiment on a stock (besides its share price, of course) is the portion of institutional investors that make up its shareholders. Institutions such as banks, hedge funds, and wealth managers deploy significant resources towards identifying good investments. If they are invested heavily in a given company's stock, it could mean it's a good investment. Or it could mean the company is being targeted by a takeover attempt.

For what it's worth, institutions own 10.4% of ToughBuilt Industries's shares, which is an average amount. It means that many institutions are invested, but not to the extent that they would be in a stock such as Apple or Amazon, whose institutional ownership rates hover around 60%. Bear in mind that institutional ownership is just one piece of the puzzle in determining market sentiment, and you should not consider this factor alone in making an investment decision.

Overall, there is mixed market sentiment on ToughBuilt Industries because of its an analyst consensus of strong upside potential, a buy rating, an average amount of shares sold short, and a very small number of institutional investors. Warren Buffett famously said that in the short term, markets are voting mechanisms, but in the long term, they are weighing mechanisms. This means that long term investors should be aware of a stock's fundamentals before committing.

Buffett was one of the fist investors to focus on free cash flow as a yardstick for a company's health. Here are TBLT's recent cash flows:

Date Reported Cash Flow from Operations ($) Capital expenditures ($) Free Cash Flow ($) YoY Growth (%)
2021-12-31 -66,184,477.0 -11,300,828.0 -77,485,305.0 -181.14
2020-12-31 -25,063,170.0 -2,497,947.0 -27,561,117.0 -144.76
2019-12-31 -10,229,337.0 -1,031,115.0 -11,260,452.0 -21.41
2018-12-31 -8,243,415.0 -1,031,115.0 -9,274,530.0 n/a
The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.