Problems at Tattooed Chef (TTCF)

Problems at Tattooed Chef (TTCF)

Tattooed Chef (NASDAQ: TTCF — $1.13 billion), describes itself as a "plant-based food company" that sells healthy frozen items like cauliflower pizza, organic raspberry kombucha smoothie mixes, and Buddha bowls. The company is run by father-daughter duo Sam and Sarah Galletti and went public via SPAC in May 2020. Tattooed Chef is growing sales roughly 45% a year, but investors may be missing significant accounting issues, management red flags, and signs of rapidly decelerating growth.

Created in 2017, the Tattooed Chef brand produces ready-to-cook meals sold in over 4,000 retail outlets in the United States. The company earns about 60% of its revenue through branded products, primarily in Sam’s Clubs, and derives the rest from private label offerings. Tattooed Chef is currently unprofitable, but trades around six times sales because investors believe in the brand and its potential for growth. That faith may be misplaced. In the last three quarters, the company’s year-over-year revenue …