BBB FOODS INC

Where It Passes

Where It Falls Short

• Profitability0% pass✓ 2✗ 33▾

  No clean pass — all 16 investors flag at least one profitability criterion

  Positive EPS (10 years)1/5 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)1/5 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-30.3%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-0.9% (latest)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-157.9M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE-68.8%

  ✗Lynch> 15%

  EBIT / Enterprise Value-0.4%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-0.4%, ROC=-15.8%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-9.30%

  ✗PiotroskiROA > 0

  ROA Change YoY1.47% -> -9.30% (delta: -10.77%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=15.34%, ROA=-9.30%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY16.3% -> 16.2%

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue-3.1%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity-68.8%

  ✗Dreman> 12%

  Margin of SafetyP/B=35.6x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity-30.3% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency1/5 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue-0.9%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity-68.8%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend1.8% (2023) -> -0.9% (2025)

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 16.0% -> 16.2%, operating margin 1.8% -> -0.9%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization-1.87%; #3538/6340 (top 55.8%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+41.42%; #909/3702 (top 24.6%)

  ✓AsnessTop 30% of eligible cross-section

  Net income / positive book equity-68.83%; #4393/5226 (top 84.1%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0394; #2271/5884 (top 38.6%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years1/5 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Valuation0% pass✓ 1✗ 27▾

  No clean pass — all 13 investors flag at least one valuation criterion

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio35.6x

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value-0.4%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-0.4%, ROC=-15.8%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)31.4x

  ✗Dreman< 8x

  Price / Book Value per Share35.6x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessOE Yield=-3.3%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=0.7%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/B=35.6x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share129.7x

  ✗Ackman<= 25

  Price vs. Trailing Low274% of trailing low ($25.52)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization-1.87%; #3538/6340 (top 55.8%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.0272; #5099/6449 (top 79.1%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share35.86x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.5149; #2591/5247 (top 49.4%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+0.75%; #2433/4519 (top 53.8%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+86.03%; #394/6202 (top 6.4%)

  ✓OshaughnessyTop 10% of eligible cross-section
• Growth0% pass✓ 2✗ 11▾

  No clean pass — all 8 investors flag at least one growth criterion

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 59.3% vs Rev: 56.1%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency1/5 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth53.3%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 16.0% -> 16.2%, operating margin 1.8% -> -0.9%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR40.1%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Efficiency0% pass✓ 1✗ 10▾

  No clean pass — all 8 investors flag at least one efficiency criterion

  Current Ratio0.62

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)8.2%

  ✗Buffett> 10%

  ROIC - WACC-1.8%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)-15.8%

  ✗Greenblatt> 25%

  Current Ratio Change YoY0.76 -> 0.62

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY2.52x -> 2.56x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities0.62

  ✗Dreman> 1.5

  Return on Invested Capital-8.4%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=unavailable; FY2024: ROIC=20.7%; FY2025: ROIC=-8.4%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)1/2 years above 12% (latest -8.4%)

  ✗SleepROIC > 12% in a majority of years
• Valuation models0% pass✗ 3▾

  TBBB overvalued: all 3 models price fair value below $70.02 (median $9.83)

  Greenblatt fair value$1.65

  ✗Greenblatt-4143.6% margin vs $70.02

  Munger fair value$9.83

  ✗Munger-612.3% margin vs $70.02

  Ackman fair value$19.33

  ✗Ackman-262.2% margin vs $70.02
• Verdicts19% pass✓ 3✗ 13▾

  Split decision: 12 FAIL · 3 PASS · 1 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (1/9)✗BuffettFAIL (0/9)✗LynchFAIL (1/7)✗GreenblattRank #1943✓PiotroskiPASS (F-Score 4)✗DremanFAIL (2/11)✗MungerFAIL (0/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (1/5)✓AckmanPASS (4/9)✗TempletonFAIL (2/8)✓SleepPASS (3/6)✗AsnessFAIL (Rank #1460/2370 (Top 61.6%))✗NeffFAIL (2/6)✗SchlossFAIL (1/7)•OshaughnessyNEUTRAL (Not ranked)
• Debt & Leverage25% pass✓ 6✗ 9▾

  9 of 12 flag TBBB's debt & leverage — Graham, Buffett, Lynch +6 more

  LT Debt vs Net Current AssetsLT Debt $7.9M vs NCA $-326.8M

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.55, IC: -0.4x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.55

  ✗Lynch< 0.33

  Cash - Long-term Debt$64.7M

  ✓LynchPositive preferred

  LT Debt / Total Assets Change0.47% -> 0.46%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities0.62

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity0.55

  ✓Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  Debt Levels0.55

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=-0.4x, D/EBITDA=2.5x

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.55

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.5451; #2559/4210 (top 60.8%)

  ✗AsnessTop 30% of eligible cross-section
• Cash Flow40% pass✓ 5✗ 7▾

  6 of 10 flag TBBB's cash flow — Buffett, Lynch, Dreman +3 more

  Free Cash Flow Proxy$-157.9M

  ✗BuffettPositive and growing

  FCF Positive and Growing$63.0M

  ✗LynchPositive and growing

  Operating Cash Flow$260.4M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=15.34%, ROA=-9.30%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)31.4x

  ✗Dreman< 8x

  P/E or FCF YieldFCF Yield=0.7%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive5/5 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap0.8%

  ✗Ackman>= 4%

  Price / FCF per Share129.7x

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency5/5 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$63.0M

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+0.75%; #2433/4519 (top 53.8%)

  ✗OshaughnessyTop 10% of eligible cross-section