Simply Better Brands and Walmart is a nice combo, Clarus says

“The big one”.

That’s how Clarus Securities analyst Noel Atkinson describes what getting its TRUBAR product into Walmart means to Simply Better Brands (Simply Better Brands Stock Quote, Chart, News, Analysts, Financials TSXV:SBBC).

On September 16, SBBC announced the rollout of its TRUBAR product into 700 Walmart locations.

“Securing distribution in Walmart stores is a major win for TRUBARand we’re delighted that our initial success online has accelerated the launch of our brand in Walmart stores,” said Erica Groussman, Co-Founder & CEO of TRUBAR. “For an emerging brand like TRUBAR, being on Walmart shelves not only boosts our credibility but also enhances consumer confidence in trying our product. Walmart prioritizes creating meaningful connections between its customers and the brands that matter most to them, and we look forward to introducing TRUBARTM to Walmart’s loyal customer base.”

“Walmart has the potential to become TRUBAR’s #1 retailer by revenue (upon a national listing),” the analyst wrote. “Walmart is by far the #1 U.S. grocery chain with over 4700 stores and over US$440 billion in grocery revenue (more than #2 Amazon/Whole Foods and #3 Costco put together). Primary comp Simply Good Foods (NASDAQ: SMPL, NR) generated over US$300MM (31%) of 2003 revenue for its protein/snack products from Walmart USA.”

In a research update to clients September 16, Atkinson maintained his “Speculative Buy” rating and price target of $1.75 on SBBC.

The analyst thinks the company will post Adjusted EBIDTA of $2.0-million on revenue of $45.8-million in fiscal 2024. He expects those numbers will improve to Adjusted EBITDA of $6.9-million on revenue of $75.0-million in fiscal 2025.

“Our confidence level in our 2024-2025 estimates has further increased. SBBC shares currently trade at just 0.8x EV/2025e TRUBAR revenues. Our near-term target price equates to 2.0x EV/2025e TRUBAR revenues. Primary public comp Simply Good Foods (Quest/Atkins products) currently trades at 2.4x EV/2025e revenues,” Atkinson added.