Ark Restaurants (ARKR) AI Stock Analysis

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Ark Restaurants

(NASDAQ:ARKR)

Rating:45Neutral

Price Target:

$8.50

▼(-1.16%Downside)

Ark Restaurants' overall stock score is driven by financial and operational challenges, as highlighted in the financial performance and technical analysis. The company faces high leverage and negative profitability, with its stock in a bearish trend. While some positive developments were noted in the earnings call, they are overshadowed by the broader risks.

Ark Restaurants (ARKR) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$31.55M

Dividend Yield2.14%

Average Volume (3M)5.67K

Price to Earnings (P/E)―

Beta (1Y)0.31

Revenue Growth-3.61%

EPS Growth-36.65%

CountryUS

Employees1,246

SectorConsumer Cyclical

Sector Strength66

IndustryRestaurants

Share Statistics

EPS (TTM)-2.57

Shares Outstanding3,606,157

10 Day Avg. Volume4,938

30 Day Avg. Volume5,673

Financial Highlights & Ratios

PEG Ratio<0.01

Price to Book (P/B)0.85

Price to Sales (P/S)0.00

P/FCF Ratio88.19

Enterprise Value/Market Cap3.49

Enterprise Value/Revenue0.18

Enterprise Value/Gross Profit1.85

Enterprise Value/Ebitda2.06

Forecast

1Y Price Target

$11.00

Price Target Upside27.91% Upside

Rating ConsensusHold

Number of Analyst Covering0

Ark Restaurants Business Overview & Revenue Model

Company DescriptionArk Restaurants Corp. (NASDAQ: ARKR) operates a diverse portfolio of dining establishments across the United States. Founded in 1983 and headquartered in New York City, the company owns and operates restaurants and bars in high-traffic areas, including New York, Washington D.C., Las Vegas, and Florida. Ark Restaurants is known for its unique dining concepts and high-quality food and beverage offerings, focusing on providing memorable dining experiences in prime locations such as casinos, shopping malls, and popular tourist destinations.

How the Company Makes MoneyArk Restaurants generates revenue primarily through the operation of its owned and managed restaurant locations. The company's revenue streams are mainly derived from food and beverage sales, which are driven by customer traffic in its strategically located dining establishments. Additionally, Ark Restaurants benefits from leasing arrangements and management contracts in certain venues, which provide supplemental income. The company's earnings are significantly influenced by its ability to attract customers through its appealing restaurant concepts and strategic partnerships with venues like casinos and entertainment centers, which help increase foot traffic and, consequently, sales.

Ark Restaurants Earnings Call Summary

Earnings Call Date:May 12, 2025

(Q2-2025)

% Change Since: -22.31%|

Next Earnings Date:Aug 18, 2025

Earnings Call Sentiment Neutral

The earnings call presents a mixed picture with positive operational improvements and financial management, offset by significant impairments and ongoing legal disputes. The positive aspects, such as increased cash flow and reduced debt, are balanced by the challenges posed by the goodwill impairment and Bryant Park lease issues.

Q2-2025 Updates

Positive Updates

Increased Cash Balance

The company's cash balance increased by approximately $900,000 from year-end, reaching $11.1 million.

Debt Reduction

The company's debt decreased to $4.3 million due to principal payments made during the quarter.

Las Vegas Performance Improvement

Significant improvement in cash flows from Las Vegas operations, with steady volumes and increased efficiencies.

Operating Cash Flow Ahead of Projections

Operating cash flow is running $2 million ahead of projections for the fiscal year.

Potential New Credit Facility

The company is finalizing a new credit facility with existing lenders, estimated to provide $15 million to $20 million in total capacity.

Negative Updates

Goodwill Impairment

A goodwill impairment of $3.4 million was recorded due to a decline in stock price.

Deferred Tax Assets Valuation Allowance

A full valuation allowance of $4.8 million was placed on deferred tax assets due to a cumulative loss position.

Legal and Consultancy Fees Impact on EBITDA

EBITDA was negatively affected by $650,000 in consultancy and legal fees related to the Bryant Park lease dispute.

Bryant Park Lease Dispute

Ongoing legal dispute over the Bryant Park lease, with allegations of a corrupted RFP process and the company being a holdover tenant.

Company Guidance

In the Ark Restaurants Second Quarter 2025 Results Conference Call, the company provided several key financial metrics and guidance. At the end of the quarter, the company reported a cash balance of $11.1 million, which increased by approximately $900,000 from the previous year-end. Their debt was reduced to $4.3 million due to principal payments. Ark Restaurants is finalizing a new credit facility that will offer $15 million to $20 million in total capacity, with the current debt termed out over three years. A significant noncash goodwill impairment of $3.4 million was recorded due to a decline in stock price, alongside a full valuation allowance of $4.8 million on deferred tax assets, impacting their tax rate. EBITDA was negatively affected by $650,000 in consultancy and legal fees related to the Bryant Park lease dispute. Despite these challenges, the company is running $2 million ahead in operating cash flow compared to projections, with improvements seen particularly in Las Vegas and Florida venues. The company is actively seeking deals and anticipates potential developments related to the Bryant Park lease and New Jersey casino licenses.

Ark Restaurants Financial Statement Overview

Summary

Ark Restaurants is experiencing significant financial challenges, with declining revenue, negative EBIT and net profit margins, and high leverage. However, the company maintains positive operating cash flow, which shows some resilience.

Income Statement

Neutral

Ark Restaurants has shown a decline in revenue with a negative revenue growth rate from 2024 to 2025. The gross profit margin for TTM is approximately 33.55%, but the company is currently operating with negative EBIT and net profit margins, indicating challenges in profitability and operational efficiency. Historically, the company had positive EBIT and net income, suggesting recent operational difficulties.

Balance Sheet

Neutral

The debt-to-equity ratio is high at approximately 2.35 in TTM, indicating significant leverage which poses financial risk. The return on equity is negative due to the net loss, reflecting poor returns for shareholders. The equity ratio is relatively low at 26.88%, suggesting a reliance on debt financing. These metrics highlight financial risk due to high leverage and negative returns.

Cash Flow

Neutral

The free cash flow has decreased significantly from previous periods, reflecting challenges in maintaining cash flow. The operating cash flow to net income ratio is negative due to net losses, but the company has managed to maintain positive operating cash flow. This indicates some resilience in cash generation despite profitability issues.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	183.54M	184.79M	183.67M	131.87M	106.49M
Gross Profit	68.18M	68.85M	71.10M	35.59M	36.93M
EBITDA	591.00K	634.00K	17.98M	22.10M	-2.94M
Net Income	-3.90M	-5.93M	9.28M	12.89M	-4.69M
Balance Sheet
Total Assets	156.04M	176.96M	209.53M	161.22M	153.32M
Cash, Cash Equivalents and Short-Term Investments	10.27M	13.41M	28.46M	19.17M	16.89M
Total Debt	95.81M	107.35M	128.64M	91.20M	101.15M
Total Liabilities	112.40M	125.23M	149.42M	109.76M	116.16M
Stockholders Equity	44.14M	50.29M	59.80M	50.41M	36.53M
Cash Flow
Free Cash Flow	2.19M	4.53M	17.65M	7.16M	-7.01M
Operating Cash Flow	4.65M	8.39M	20.35M	9.29M	-4.53M
Investing Cash Flow	-2.39M	1.28M	-7.76M	-3.45M	-2.46M
Financing Cash Flow	-5.40M	-19.69M	-8.32M	-3.56M	16.69M

Ark Restaurants Technical Analysis

Technical Analysis Sentiment

Negative

Last Price8.60

Price Trends

50DMA

9.67

Negative

100DMA

9.77

Negative

200DMA

10.83

Negative

Market Momentum

MACD

-0.24

Negative

RSI

37.50

Neutral

STOCH

24.11

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARKR, the sentiment is Negative. The current price of 8.6 is below the 20-day moving average (MA) of 8.77, below the 50-day MA of 9.67, and below the 200-day MA of 10.83, indicating a bearish trend. The MACD of -0.24 indicates Negative momentum. The RSI at 37.50 is Neutral, neither overbought nor oversold. The STOCH value of 24.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARKR.

Ark Restaurants Risk Analysis

Ark Restaurants disclosed 32 risk factors in its most recent earnings report. Ark Restaurants reported the most risks in the "Production" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Ark Restaurants Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RAVE	78 Outperform	$41.92M	16.19	21.75%	―	2.93%	20.81%
BDL	75 Outperform	$59.48M	14.69	6.48%	1.72%	9.38%	14.76%
GTIM	65 Neutral	$15.57M	14.78	3.45%	―	4.21%	73.81%
Sector *	62 Neutral	$16.51B	10.46	-8.28%	3.32%	1.44%	-22.58%
ARKR	45 Neutral	$31.55M	―	-22.57%	2.14%	-3.61%	-36.65%
NDLS	45 Neutral	$42.68M	―	-978.37%	―	-0.61%	-200.32%
FAT	45 Neutral	$41.08M	―	38.50%	132.46%	0.96%	-57.29%

* Consumer Cyclical Sector Average

Performance Comparison

ARKR

Ark Restaurants

8.60

-4.97

-36.62%

BDL

Flanigan's Enterprises

32.00

5.95

22.84%

GTIM

Good Times Restaurants

1.43

-1.20

-45.63%

RAVE

Rave Restaurant Group

3.01

1.18

64.48%

NDLS

Noodles & Co

0.93

-0.90

-49.18%

FAT

Fat Brands

2.28

-0.60

-20.83%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 31, 2025