Traeger, Inc, It's A Smoking Hot Stock

The Analysts Take A Big Bite Of Traeger, Inc.

Traeger, Inc. NYSE: COOK  has been a smoking hot issue since its IPO only a few short weeks ago. The company manufactures and markets a range of BBQ grilling products that are supported by a healthy digital platform its users love. The company just emerged from its quiet period and scored not 1, but 9 major sell-side comments before the open of trading. The general consensus among the analyst is very bullish. Only one of the nine ranks the stock at neutral but in our eyes, even that is equal to a buy when coming from a sell-sider. With more of the analyst than not rating the stock at outperform or overweight, we feel the $31.13 consensus estimate is a bit too low.

The range of analyst estimates runs from $28 to $36 with the high held by Jefferies Financial Group. The $36 target is worth about 28% upside from recent price action and even that is too low in light of trends within the outdoor recreation market. Companies ranging from fishing and camping to lawn and garden and RVs are reporting sustained high levels of growth in the wake of the pandemic and we see the same trends driving Traeger. The round of commentary has the stock up more than 13% in early trading and confirming what looks to be a very strong uptrend. The next big hurdle for the stock will be at the $32 level and it may be surpassed before the end of the summer.

eCommerce Underpins Triggers Appeal

eCommerce underpins Traeger’s appeal as much as anything else. As strong as the trends supporting the outdoor lifestyle, trends in eCommerce are equally strong. Where these two trends collide we have found great success and that is evidenced by names like Williams-Sonoma NYSE: WSM and Tractor Supply Company NASDAQ: TSCO. Williams-Sonoma is comparable as a home and lifestyle company oriented on food as well as for its e-commerce business. Williams-Sonoma is one of the biggest winners of the pandemic because of its focus on e-commerce and has seen its net revenue accelerate to 40% above the 2019 levels because of it.

Tractor Supply Company began embracing e-commerce before the pandemic in a similar fashion and was also well rewarded for the effort. Tractor Supply is comparable for its focus on outdoor lifestyles which they refer to as Life Out Here. Tractor Supply just reported a triple-digit increase in its e-commerce sales on top of a triple-digit increase in e-commerce sales last year. This makes the fourth consecutive quarter of strong triple-digit increases in e-commerce for this company and a strategy that we are very glad they embraced. 

The key takeaway is that Traeger's revenue and earnings potential should not be underestimated. While we expect to see seasonal strength in the business, the company should sustain strong sales throughout the year aided by traffic at its eCommerce and social media portals.

Weber, Inc. Is The Next Opportunity 

Competitor Weber, Inc. NYSE: WEBR  is the next opportunity for investors. This company IPO'd a week or so after Traeger and his set up in a similar fashion. The stock has performed well since the IPO but retreated from a high with the end of the quiet period fast approaching. We will not be surprised to see a similar group of analysts come out with positive comments on this stock and drive its share prices up by similar figures. Weber also has a great eCommerce portal and the benefit of name recognition.