Equity Research Analysis: TANDY LEATHER FACTORY INC (TLF)
|Blank Capital Research Unit|Spot: $3.06
Price$3.06
Composite Score50.6/100
RatingHOLD (3★)
Rank#1915 OF 7,333
Market Cap$24M
P/E Ratio
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Tandy Leather Factory, Inc. operates as a retailer of leather and leathercraft-related items in North America and Spain. It offers leather, hand tools, hardware, kits, liquids, teaching materials, open workbenches, machinery, and other accessories and supplies. The company also manufactures leather laces, cut leather pieces, do-it-yourself kits, thread laces and belt strips and straps.
Manufacturing
Apparel
$24.20M
590
Fort Worth, Texas
Janet Carr
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High yield — monitor payout sustainability closely.
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| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$UL UNILEVER PLC | 78 | 96 | 98 | 59 | - | - | 28.5% | 8.0% | 100.0% | 100.0% | 10.4% | -4.6% | 3.3% | 0.0x | $141.8B | VS | |
$ASML ASML HOLDING NV | 77 | 89 | 86 | 83 | - | - | 46.1% | 16.6% | 51.3% | 31.9% | 26.8% | -4.0% | 1.0% | 25.0x | $272.1B | VS | |
$ESLT ELBIT SYSTEMS LTD | 76 | 81 | 87 | 85 | - | - | 10.3% | 3.1% | 24.1% | 7.2% | 4.7% | 14.3% | 0.8% | 25.0x | $11.4B | VS | |
$MT ArcelorMittal | 75 | 71 | 98 | 85 | - | - | 2.2% | 1.5% | 9.3% | 5.3% | 2.2% | -8.5% | 2.2% | 16.0x | $18.9B | VS | |
$AMAT APPLIED MATERIALS INC /DE | 75 | 85 | 87 | 84 | 20.9x | 13.6x | 35.5% | 19.8% | 48.7% | 29.2% | 24.7% | 4.4% | 0.8% | 32.0x | $181.9B | VS | |
$SIMO Silicon Motion Technology CORP | 75 | 84 | 86 | 85 | - | - | 11.8% | 8.8% | 45.9% | 11.3% | 11.1% | 25.7% | 3.7% | 0.0x | $1.8B | VS | |
$CODA Coda Octopus Group, Inc. | 74 | 83 | 90 | 79 | 16.3x | 11.9x | 7.6% | 7.0% | 66.5% | 17.1% | 15.6% | 39.0% | 0.0% | 0.0x | $115M | VS | |
$GSK GSK plc | 74 | 84 | 90 | 70 | - | - | 22.6% | 4.9% | 71.2% | 12.8% | 9.4% | 1.7% | 5.9% | 124.0x | $72.1B | VS | |
$EFXT Enerflex Ltd. | 74 | 80 | 91 | 83 | - | - | 3.0% | 1.1% | 20.9% | 7.3% | 1.3% | 3.0% | 0.9% | 67.0x | $1.2B | VS | |
$BUD Anheuser-Busch InBev SA/NV | 74 | 84 | 97 | 63 | - | - | 8.2% | 3.5% | 55.3% | 25.9% | 12.4% | 0.7% | 1.7% | 0.0x | $87.0B | VS | |
$TLF TANDY LEATHER FACTORY INC | 51 | 61 | 51 | 28 | 2.5x | - | 18.6% | 11.7% | 58.1% | -0.9% | 12.8% | -0.1% | 50.0% | 58.0x | $24M | ||
| SECTOR BENCH | - | - | - | - | - | 22.3x | 11.5x | -2.5% | -0.1% | 42.5% | 1.3% | -0.2% | 5.9% | 0.0% | 0.2x | - | REF |
TANDY LEATHER FACTORY INC (TLF) receives a "Hold" rating with a composite score of 50.6/100. It ranks #1915 out of 7,333 stocks in our coverage universe and carries a 3-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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Janet Carr
Chief Executive Officer
Labor Force
590
61
31
70
Audit Verdict: Average governance indicators based on financial metrics.
No recent insider transactions available for TLF
Lagging peers — losers tend to keep underperforming
Fair valuation relative to peers
High profitability & efficiency — strong quality floor supports entry
Low volatility — smoother ride and historically better risk-adjusted returns
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Manufacturing sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for TLF.
View All RatingsYOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Financial leverage load
Direct cash return
Material decline in asset turnover efficiency detected
High margin volatility — erratic forensic earnings quality
Capital Income Projection
A $10,000 capital deployment would generate approximately $5000 annually in verified dividends.
| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 61 | 60 | +1NEUTRAL |
| MOMENTUM | 28 | 7 | +21ALPHA |
| VALUATION | 51 | 31 | +20ALPHA |
| INVESTMENT | 31 | 41 | -10DRAG |
| STABILITY | 70 | 65 | +5NEUTRAL |
| SHORT INT | 50 | 48 | +2NEUTRAL |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROE proxy 18.6% (sector -2.5%)
GM 58% vs sector 43%, OM -1% vs sector 1%
Capital turnover N/A
Rev growth -0%, 10yr history
Interest coverage N/A
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
Our model assigns TANDY LEATHER FACTORY INC a Hold rating, with a composite score of 50.6/100 and 3 out of 5 stars. Ranked #1915 of 7,333 stocks, TLF presents a mixed quantitative picture — neither compelling enough to initiate new positions nor weak enough to warrant selling. Investors already holding may consider maintaining their position while monitoring for changes in the factor profile.
With a quality score of 61/100, TLF shows adequate but unremarkable business quality. The company reports a return on equity of 18.6% (sector avg: -2.5%), gross margins of 58.1% (sector avg: 42.5%), net margins of 12.8% (sector avg: -0.2%). This suggests the company generates acceptable returns but may lack the competitive positioning or operational efficiency to stand out from peers.
TLF's value score of 51/100 indicates the stock is fairly valued based on its current fundamentals. Key valuation metrics include a P/E ratio of 2.53x, a P/B ratio of 0.47x. At this level, neither a clear bargain nor overpriced, the stock's attractiveness depends more on forward growth expectations and qualitative factors.
TANDY LEATHER FACTORY INC's investment score of 31/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of -0.1% vs. a sector average of 5.9% and a return on assets of 11.7% (sector: -0.1%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
TANDY LEATHER FACTORY INC is experiencing notably weak momentum with a score of just 28/100. The stock has underperformed its peers and is trending below major moving averages. Revenue growth stands at -0.1% year-over-year, while a beta of 0.18 reflects its sensitivity to broader market moves. While deep momentum weakness can occasionally present value opportunities, it often reflects deteriorating fundamentals or structural headwinds that may persist.
TLF shows good financial stability with a score of 70/100. Key stability metrics include a beta of 0.18 and a debt-to-equity ratio of 58.00x (sector avg: 0.2x). This suggests manageable leverage and moderate price volatility, making it appropriate for investors seeking a balance between growth potential and capital preservation.
The short interest score of 50/100 for TLF suggests somewhat elevated bearish positioning by institutional traders. Specific risk factors include elevated leverage (D/E: 58.00x), micro-cap liquidity risk. With a $24M market cap (micro-cap), TANDY LEATHER FACTORY INC may experience above-average volatility. Investors should consider whether the short thesis has merit or if it creates a potential short-squeeze opportunity.
TANDY LEATHER FACTORY INC offers an attractive dividend yield of 50.0%, placing it among the higher-yielding stocks in its peer group. A yield this high can provide meaningful income, but investors should verify the payout is sustainable by examining the payout ratio, free cash flow coverage, and any history of dividend cuts.
TANDY LEATHER FACTORY INC is a micro-cap company in the Manufacturing sector, ranked #0 of 50 in its sector (100th percentile) and #1915 of 7,333 overall (74th percentile). Key comparisons include ROE of 18.6% exceeding the -2.5% sector median and operating margins of -0.9% below the 1.3% sector average. This top-quartile standing reflects exceptional competitive strength relative to Manufacturing peers.
While TLF currently exhibits a HOLD profile, superior opportunities exist within the MANUFACTURING sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
View Top Manufacturing Alpha →Quant Factor Profile
Key factor gap
Stability (70) vs Momentum (28) — closing this gap could shift the rating.
ROE 848% BELOW SECTOR MEDIAN
Gross Margin 37% ABOVE SECTOR MEDIAN (FAVORABLE)
Op. Margin 172% BELOW SECTOR MEDIAN
AUDIT DATA AS OF SEP 30, 2025 (Q2 FY2025)
We rate TANDY LEATHER FACTORY INC (TLF) as a Hold with a composite score of 50.6/100 at a current price of $3.06. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.
The rating is primarily driven by strength in stability (70th percentile) and quality (61th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (28th percentile) and investment (31th percentile) tempers our overall conviction. We assign a No Moat rating (35/100), Low uncertainty, and Standard capital allocation.
Key items to watch: momentum to confirm whether the current price trend has legs. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
TANDY LEATHER FACTORY INC holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 50.6/100 places it at rank #1915 in our full 7,333-stock universe. At $24M in market capitalization, TANDY LEATHER FACTORY INC is a small-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.
Revenue contraction of -0% combined with momentum at the 28th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.
The margin cascade tells an important story: gross margins of 58% (+15.6pp vs sector) narrow to operating margins of -1% (-2.2pp vs sector) and net margins of 12.8%, yielding a gross-to-net conversion rate of 22%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.
At a current price of $3.06, TANDY LEATHER FACTORY INC is trading near fair value based on current fundamentals. Our value factor score of 51/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.
The stock currently trades at a P/E of 2.5x (a 89% discount to the sector median of 22.3x), P/B of 0.5x, P/S of 0.3x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.
Gross margins of 58% signal strong pricing power and brand/IP advantages — businesses with margins above 40% have historically demonstrated more resilient earnings through economic cycles.
Returns on equity of 18.6% exceed the cost of equity for most companies, indicating genuine shareholder value creation and a reinvestment engine that compounds wealth over time.
A 50.00% dividend yield provides income while you wait, and dividends historically account for a significant portion of total equity returns.
Return on assets of 11.7% indicates efficient deployment of the full asset base, not just equity capital.
Revenue decline of -0% signals business deterioration — declining revenues make it difficult to grow into the current valuation and often precede further negative revisions.
We assign a Low uncertainty rating to TANDY LEATHER FACTORY INC. The company exhibits strong financial stability with a beta of 0.18, and a stability factor in the 70th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.
Specific risk factors that inform our assessment include: low beta of 0.18 — while defensive, this may indicate limited upside participation in bull markets. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 70th percentile and quality factor at the 61th percentile provide a quantitative summary of the overall risk landscape.
Key risk mitigants include: healthy gross margins of 58% provide a buffer against cost pressures; above-average stability (70th percentile) suggests predictable business dynamics; a 50.00% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.
We rate TANDY LEATHER FACTORY INC's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 18.6%, and the balance sheet is managed within acceptable parameters (D/E: 58%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; TANDY LEATHER FACTORY INC falls short on at least one dimension.
There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 50.00% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.
In summary, TANDY LEATHER FACTORY INC receives a Hold rating with a composite score of 50.6/100 (rank #1915 of 7,333). Our quantitative framework assigns a No Moat (35/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 48/100.
Our analysis supports a neutral stance on TANDY LEATHER FACTORY INC. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We do not assign TANDY LEATHER FACTORY INC a meaningful economic moat, scoring 35/100 on our composite assessment. Current fundamentals do not demonstrate the kind of durable competitive advantages — such as superior returns on invested capital, margin superiority, or reinvestment efficiency — that would protect the company from competitive erosion over the long term. The highest-scoring pillar, margin superiority, reached only 14.3/20.
The strongest moat sources are margin superiority (14.3/20) and financial resilience (9.3/20). GM 58% vs sector 43%, OM -1% vs sector 1%. Interest coverage N/A. These pillars form the core of TANDY LEATHER FACTORY INC's competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include reinvestment efficiency (0/20) and growth durability (2.4/20). Capital turnover N/A. Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect TANDY LEATHER FACTORY INC's moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include gross margins of 58% providing a solid profitability foundation, declining revenues (-0%) that pressure the earnings outlook, returns on equity of 18.6% driving shareholder value creation. The margin cascade from 58% gross to -1% operating to 12.8% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that the profit engine is high-quality and likely sustainable, with the quality factor at the 61th percentile.
The margin profile shows gross margins of 58%, operating margins of -1%, net margins of 12.8%. Return metrics include ROE of 18.6% and ROA of 11.7%. Relative to the Manufacturing sector, gross margins are 15.6 percentage points above the sector median of 43%, and ROE of 18.6% compares to a sector median of -2.5%.
The balance sheet reflects moderate leverage with D/E of 58%, a dividend yield of 50.00%, revenue growth of -0%. The sector median D/E is 0%, putting TANDY LEATHER FACTORY INC at higher leverage than the typical peer. Overall balance sheet health is adequate for the current business environment.
Weak momentum (28th percentile) suggests institutional selling pressure and unfavorable technical dynamics that may persist.
Above 50MA
37.18%
Net New Highs
+51081
Tandy Leather Factory, Inc. (NASDAQ: TLF) has declared a special cash dividend of $0.75 per share, payable around February 24, 2026, to shareholders of record by February 9. This marks the company's second special dividend in two years, following a $1.50 payout in February 2025. Despite a low P/E ratio of 2.43 and strong liquidity, the company has been quickly burning through cash, as indicated by InvestingPro data.
Tandy Leather Factory (Nasdaq: TLF) has declared a special cash dividend of $0.75 per share, payable around February 24, 2026, to shareholders of record as of February 9, 2026. This dividend follows a successful relocation of their offices and distribution center and the opening of a new flagship store. The company also plans to discuss its fourth-quarter and full-year 2025 results with investors in late February.
Tandy Leather Factory's recent earnings report, despite healthy profit numbers, reveals underlying issues that weaken its profitability foundation. A high accrual ratio of 0.42 and significant boosting from unusual items suggest that the reported profits may not accurately reflect the company's true earnings power. The company also burned through US$8.3m in free cash flow, indicating that its statutory profits could be misleadingly positive.
Tandy Leather Factory, Inc. (NASDAQ:TLF) has seen its share price drop 25% in the last month and 35% over the past year, despite its price-to-sales (P/S) ratio of 0.3x being comparable to the industry median of 0.4x. The company's revenue has been declining, shrinking by 2.4% last year and 10% over the last three years, in contrast to the industry's expected growth of 4.8%. This raises concerns that the current P/S ratio may not be sustainable given the poor revenue performance, potentially putting shareholders' investments at risk.
Tandy Leather Factory (Nasdaq: TLF) has completed the sale of its corporate headquarters and entered a ten-year lease for a new 134,000 square-foot facility in Benbrook, Texas, effective July 2025. The company also declared a special cash dividend of $1.50 per share to stockholders. This move allows Tandy Leather Factory to monetize an under-utilized asset, return proceeds to stockholders, and establish a better-sized headquarters while aiming for sales growth and improved profitability.