What Tootsie Roll Industries’ Latest Earnings Reveal

Tootsie Roll Industries (TR) reported second quarter and first half 2026 results on August 7, with stable revenue but lower net income and earnings per share compared with the same periods in 2025.

For the second quarter, revenue was US$154.22 million compared with US$155.09 million a year earlier. Net income was US$13.35 million compared with US$17.54 million, and basic earnings per share from continuing operations was US$0.18 compared with US$0.23.

Across the first six months of 2026, revenue came in at US$305.76 million compared with US$303.54 million in the prior year period. Net income was US$31.01 million compared with US$35.6 million, with basic earnings per share from continuing operations at US$0.41 compared with US$0.47.

The latest earnings release appears to have shifted sentiment around Tootsie Roll Industries, with the share price at US$40.53 and a 30 day share price return of 6.6% helping lift the year to date share price return to 17.89%. The 5 year total shareholder return of 48.48% points to a steadier longer term record, despite a more modest 1 year total shareholder return of 6.4%.

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Tootsie Roll Industries shares have climbed after this earnings update even though profit is lower on broadly stable revenue. Does the current price still offer an appealing balance between risk and potential reward for new buyers?

Price-to-Earnings of 31.8x: Is it justified for Tootsie Roll Industries?

On a P/E of 31.8x and a last close of $40.53, Tootsie Roll Industries stock looks expensive compared with both its peer group and the broader US Food industry.

The P/E ratio compares the current share price with earnings per share. For a business like Tootsie Roll Industries that already reports high quality earnings and positive profit margins, a higher P/E can indicate the market is willing to pay more for each dollar of current earnings.

However, the data points to a valuation that is rich relative to alternatives. Tootsie Roll Industries trades on a P/E of 31.8x, while peers on average sit at 13.4x. That is a sizeable gap for a company where recent earnings growth of 5% over the past year is below its 5 year average of 9.6% per year.

Compared with the broader US Food industry, which trades at an average P/E of 19.4x, Tootsie Roll Industries again sits at a premium. The stock therefore carries a meaningfully higher earnings multiple than both direct peers and the wider sector, which suggests the market is pricing in stronger resilience or quality than these benchmarks.

Result: Price-to-Earnings of 31.8x (OVERVALUED)

However, Tootsie Roll Industries still carries risks if its current P/E stays high while earnings remain under pressure, or if confectionery demand softens in key markets.

Another View on Tootsie Roll Industries’ Valuation

The high P/E ratio paints Tootsie Roll Industries as expensive, and the SWS DCF model points in the same direction. At a share price of $40.53 and an estimated future cash flow value of $33.79, the stock screens as overvalued on cash flows as well. How much of this premium are you comfortable paying?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Tootsie Roll Industries for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

The mixed signals around Tootsie Roll Industries can leave investors split on what comes next, so it helps to move fast and check the underlying data for yourself. To weigh the potential upside that others are watching, review the 1 key reward

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.