BAB (BABB) AI Stock Analysis

• Market Cap: $7.09M
• Dividend Yield: 6.69%
• Average Volume (3M): 12.64K
• Price to Earnings (P/E): 13.0
• Beta (1Y): -0.01
• Revenue Growth: -7.46%
• EPS Growth: 2.95%
• Country: US
• Employees: 11
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): 0.02
• Shares Outstanding: 7,264,000
• 10 Day Avg. Volume: 17,558
• 30 Day Avg. Volume: 12,642
• PEG Ratio: 1.66
• Price to Book (P/B): 1.74
• Price to Sales (P/S): 1.75
• P/FCF Ratio: 14.82
• Enterprise Value/Market Cap: 0.75
• Enterprise Value/Revenue: 1.54
• Enterprise Value/Gross Profit: 1.63
• Enterprise Value/Ebitda: 7.00
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: $1.00 ▼(-0.99% Downside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

The score is driven primarily by solid financial performance (strong margins, improving low leverage) with some concern from softer recent cash conversion and slowing growth. Technicals add support via an upward trend above key moving averages, and valuation is favorable with a reasonable P/E and a high dividend yield.

Positive Factors

High Margins & Profitability

Sustained double-digit EBIT and net margins indicate the business converts revenue to profit efficiently. Over 2-6 months this margin durability supports reinvestment, dividend coverage and resilience to revenue cycles, reducing dependency on rapid top-line growth to drive earnings.

Low, Improving Leverage

Low and improving leverage gives the company financial flexibility to fund capex or weather downturns without stretching cash flows. A conservative balance sheet supports long-term strategic actions and reduces refinancing risk over the next several quarters.

Recurring Fee & Partnership Revenue

A fee-and-subscription model with strategic partnerships produces recurring, more predictable revenue. This structural mix supports steady cash inflows, higher customer lifetime value, and scalable marginal economics that remain valuable across multi-month planning horizons.

Negative Factors

Slowing Revenue Growth

A decelerating top-line trend constrains long-term earnings upside and forces greater reliance on margins and cost control to sustain profits. Over 2-6 months this reduces optionality for aggressive reinvestment and can limit market share gains in competitive fintech segments.

Weaker Cash Conversion

Declining FCF and lower OCF-to-net-income coverage signal volatility in cash generation. This weakens the company’s ability to self-fund growth, sustain dividends, or absorb shocks, increasing reliance on external financing or curtailment of strategic initiatives over the medium term.

Historical Volatility & Data Anomaly

Past loss and anomalous reporting in gross margin undermine confidence in trend analysis and forecasting. Structural planning and investor assessment are harder when historical results show volatility or reporting inconsistencies, raising execution and disclosure risk over coming quarters.

BAB Business Overview & Revenue Model

Company Description

BAB, Inc. franchises and licenses bagel and muffin retail units under the Big Apple Bagels (BAB), My Favorite Muffin (MFM), and SweetDuet (SD) trade names in the United States. It's BAB franchised brand consists of daily baked bagels, flavored cream cheeses, premium coffees, gourmet bagel sandwiches, and other related products. The company's MFM brand comprise of various freshly baked muffins and coffees; and units operating as My Favorite Muffin Your All Day Bakery Café featuring specialty bagel sandwiches and related products. Its SD brand includes frozen yogurt products. As of November 30, 2021, the company had 68 franchise units and 4 licensed units in operation in 20 states. BAB, Inc. was incorporated in 2000 and is based in Deerfield, Illinois.

How the Company Makes Money

BAB generates revenue primarily through transaction fees associated with its digital banking services and DeFi solutions. Each transaction processed on the platform incurs a fee, contributing to a steady revenue stream. Additionally, the company leverages subscription models for premium services offered to users, providing ongoing income. Strategic partnerships with financial institutions and technology providers also bolster revenue, as they create opportunities for co-branded services and expanded market reach. These collaborations may include revenue-sharing agreements, further enhancing its financial performance.

BAB Financial Statement Overview

Summary

Strong recent profitability (2025 net margin ~16%, EBIT margin ~21%) and improving, low leverage (debt-to-equity ~0.10) support a solid financial profile. Offsetting factors include decelerating revenue growth, weaker 2025 cash conversion/FCF vs. 2024, historical volatility (2020 loss), and a likely 2025 gross margin data anomaly that reduces confidence in the latest gross-profit trend.

Income Statement

Profitability is solid and consistent in the most recent years, with 2025 net margin at ~16% and EBIT margin at ~21%, and net income rising from $467k (2023) to $559k (2025). Revenue growth has slowed materially (2024 ~1% and 2025 ~5%) versus the stronger rebound earlier in the cycle, and 2020 showed a loss and revenue decline, highlighting some historical volatility. Also, the 2025 gross margin is reported as 0%, which looks like a data anomaly and reduces confidence in gross-profit trend analysis for the latest year.

Balance Sheet

Leverage is low and improving, with debt-to-equity declining to ~0.10 in 2025 (from ~0.23 in 2020), supporting financial flexibility. Equity has grown steadily (about $2.57M in 2020 to $3.46M in 2025), and returns on equity are healthy (~16% in 2025) after the 2020 setback. The main watch item is that debt rose sharply from 2023 to 2024–2025, even though it remains manageable relative to equity.

Cash Flow

Cash generation is positive, with 2025 operating cash flow of ~$414k and free cash flow matching operating cash flow. However, free cash flow fell ~38% in 2025 after a stronger 2024, and operating cash flow covered only ~71% of net income in 2025 (down from ~88% in 2024), suggesting weaker cash conversion in the latest year. Cash flow was also uneven earlier (notably low operating cash flow in 2022), indicating variability that investors should monitor.

Breakdown	Nov 2025	Nov 2024	Nov 2023	Nov 2022	Nov 2021
Income Statement
Total Revenue	3.44M	3.55M	3.51M	3.29M	3.07M
Gross Profit	3.43M	3.55M	3.51M	3.18M	2.09M
EBITDA	784.52K	681.08K	618.58K	612.21K	874.72K
Net Income	559.04K	525.20K	467.32K	431.99K	651.12K
Balance Sheet
Total Assets	5.02M	4.84M	4.30M	4.29M	4.46M
Cash, Cash Equivalents and Short-Term Investments	2.15M	2.18M	1.89M	1.62M	1.46M
Total Debt	330.21K	378.06K	39.82K	153.70K	260.09K
Total Liabilities	1.55M	1.50M	1.12M	1.22M	1.53M
Stockholders Equity	3.46M	3.34M	3.18M	3.08M	2.93M
Cash Flow
Free Cash Flow	406.74K	636.70K	533.19K	135.04K	715.77K
Operating Cash Flow	414.39K	637.75K	534.37K	135.04K	718.30K
Investing Cash Flow	-5.65K	-9.96K	-1.18K	0.00	-2.52K
Financing Cash Flow	-435.81K	-363.18K	-363.18K	-290.54K	-290.54K

BAB Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.01
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BABB, the sentiment is Positive. The current price of 1.01 is above the 20-day moving average (MA) of 0.98, above the 50-day MA of 0.95, and above the 200-day MA of 0.89, indicating a bullish trend. The MACD of 0.01 indicates Positive momentum. The RSI at 53.03 is Neutral, neither overbought nor oversold. The STOCH value of 78.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BABB.

BAB Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BABB	76 Outperform	$7.09M	12.98	16.66%	6.69%	-7.46%	2.95%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
PETZ	52 Neutral	$12.08M	7.00	6.15%	―	-39.41%	―
SOWG	48 Neutral	$5.62M	-0.22	-84.22%	―	-81.88%	-672.01%
BON	46 Neutral	$13.33M	-5.82	1.32%	―	-15.44%	-94.04%
HCWC	46 Neutral	$5.52M	―	―	―	―	―
FAMI	42 Neutral	$19.61M	-0.05	-3.22%	―	-49.19%	-394.71%