YB new stock pitches (Tue, Sep 8)

Tilly’s is emerging from a COVID-era overordering and stale-inventory downturn, but the valuation still appears anchored to a structurally declining, low-margin retailer. At $4.23, the company has a $129M market cap, $62M of cash and marketable securities, no debt and just $67M of enterprise value. The turnaround now has operating evidence: Q2 comps rose 12%, gross margin reached 35.5% and operating margin was 5%; August comps increased 14.6%, and the turnaround had reached 13 consecutive months of year-over-year sales growth. The operating-leverage case assumes $650-700M of FY2027 revenue and a 5% operating margin, producing $32.5-35M of operating profit and roughly $45M of EBITDA. If cash reaches $85M+, the current price equates to about 1x FY2027 EV/EBITDA, or 5.x EV/EBITDAR after considering substantial store leases. Dividends could resume next year as cash builds, consistent with prior distributions. The principal concern is control by one individual through Class B shares carrying roughly 10x voting rights, requiring continued fair treatment of minority holders

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iFabric designs treated-fabric apparel, including infection-resistant scrubs, footwear and intimates, outsources manufacturing to China and sells through major retailers including Walmart, Costco and Target. The business is inflecting: H1 2026 revenue reached C$37.1M, already above C$33M for all of FY2025, while operating leverage lifted EBITDA from C$50K to C$5.49M. Growth avenues include expanding Walmart scrubs from eight SKUs in 1,400 stores toward a possible 12 SKUs in 4,800 stores, broader programs with Target, Roots and Costco, international expansion, and new categories such as bedding, luggage, hard surfaces and European swimwear. Higher-margin intimates have also shifted from royalties to sales under iFabric’s own brand. At C$4, the C$146.1M company trades at 17.6x LTM adjusted EBITDA; an end-2027 scenario of C$105M revenue, C$16.9M EBITDA and a 20x multiple yields C$9.33 per share. The real test is sustaining growth while expanding margins without dilution, with additional risks from Walmart concentration, China manufacturing and tariffs.

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Playboy’s shift to a capital-light model is beginning to show in the financials, while the shares remain down 36% year to date and receive little credit for the turnaround. After a mixed 2022-2024 period marked by planned revenue declines, flat adjusted EBITDA and heavy dilution, revenue increased from 2024 to 2025 and adjusted EBITDA improved from -$6M to $17M. LTM adjusted EBITDA is now roughly $23M, with multi-year licensing agreements providing evidence of capital-light revenue traction. Dilution remained a problem as shares rose from roughly 90M to 113M, but the announced repurchase of approximately 16.6M Fortress shares would reduce pro forma shares outstanding to about 105M. The payoff case assumes adjusted EBITDA grows modestly to $30M, net debt falls to zero and the business receives a 10x EV/EBITDA multiple, implying 144% upside. The central unresolved issue is net debt, which has remained flat; further EBITDA growth, repurchases or a higher multiple would add upside but are not required by the base case.

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