Here’s Where to Get in on Tattooed Chef (NASDAQ: TTCF) Stock

Plant-based food company Tattooed Chef, Inc. NASDAQ: TTCF stock has been on a tear as it outperforms the benchmark S&P 500 index NYSEARCA: SPY. The pandemic has accelerated the socially health conscious trend of sustainable plant-based food consumption lead by companies like Beyond Meat NASDAQ: BYND. Tattooed Chef went public via reverse merger into the Forum Merger II Corporation, a special-purpose-acquisition-company (SPAC). The Company’s cauliflower crusted pizza and premium plant-based frozen foods can be found in major grocery wholesale club chains including Costco NASDAQ: COST and Walmart NYSE: WMT and Sam’s Club stores. The Company recently announced plant-based meat products in their vegan and keto to much acclaim sparking further interest in shares. Prudent risk-tolerant investors seeking exposure in the plant-based protein segment can watch shares of Tattooed Chef for opportunistic pullback levels for exposure.  

Preliminary Q3 FY 2020 Projections

On Oct. 6, 2020, the Company announced preliminary revenues for Q3 2020 at a record $41 million, up 71% year-over-year (YoY) preceding the reverse merger with Forum Merger Corp II. CEO Sam Galletti stated, “Our strong third quarter revenue resulted were driven by our Tattooed Chef branded products and we expect this trend to continue to accelerate as we launch our new e-commerce platform later this month. Given this and increased distribution to our tier one customers, we believe we are well positioned to meet or exceed our full year revenue expectation of $148 million and Adjusted EBITDA expectation of $17 million.” The Company released its actual numbers for Q3 2020 on Nov. 9, 2020, with revenues coming in at $41 million, up 65% YoY. The Tattooed Chef branded product revenues were $22.6 million compared to $5.8 million, up 288% YoY. Net loss was $3.3 million, or 3.6% of net revenues compared to $1.8 million net income, or 9.4% of net revenue, due to $4.6 million of non-recurring transaction costs. Adjusted EBITDA was $1.5 million versus $2.3 million YoY. The Company had $95 million in cash and cash equivalents following the Business Completion (reverse merger with SPAC) on Oct. 15, 2020 and $5 million in line of credit.

The Plant-Based Food Trend

The Tattooed Chef “plant-powered” food brand incorporates the natural, organic, non-GMO and no artificial ingredients components trends in its products. This enables them to command premium prices with high-quality ingredients and a fast growing customer base. The company fits into the organic plant-based and ESG investment themes. Distribution beyond wholesale club retailers will be key moving forward to attract more consumers to its products. The Company does provide white label deals with grocers like Trader Joes, but penetration into mainstream grocers like The Kroger Co. NYSE: KRO and Whole Foods Markets NASDAQ: AMZN will be a real boost to drive sales. The one advantage to Beyond Meat NASDAQ: BYND is that Tattooed Chef is already profitable and growing at a slightly better pace. Of course, Beyond Meat sells more in a quarter than Tattooed Chef does in a year, but it’s still in early stages as the Company continues to rollout more innovative products expanding between ready-to-cook bowls, zucchini spirals, riced cauliflower, acai and smoothie bowls. Prudent investors seeking to get in on the hypergrowth trend of sustainable plant-based foods can watch shares of Tattooed Chef for opportunistic pullbacks.

 TTCF Opportunistic Pullback Levels

Using the rifle charts on weekly and daily charts can provide a near-term perspective of the playing field. The weekly rifle chart completed a full oscillation down and crossed back up through the 20-band causing shares to surge on the $18.55 Fibonacci (fib) level break which also happens to be the weekly market structure low (MSL) buy trigger. The daily rifle chart rallied rapidly following the Nov. 17, 2020, earnings release triggered both MSLs above $16.28 and $18.56 as the stochastic surged through the 80-band and recoiled back up towards the 90-band. The upside resistance levels at $26.70 and $28.60 will come into play if the daily stochastic forms a mini pup as the daily upper Bollinger Bands target the $28.60 fib. If the daily stochastic peaks for a crossover back down under the 80-band, then a channel tightening reversion can form to provide opportunistic pullback levels at the $21.83 fib, $20.26 fib, $19.23 fib, $18.55 weekly MSL/fib, and the $17.41 fib. The upside trajectories range from the $28.60 daily upper BB/fib to $37.72 fib, with even more upside contingent on expanding its retailer distribution beyond the wholesale club base.