Fat Brands (FAT) AI Stock Analysis

• Market Cap: $8.59M
• Dividend Yield: 724.22%
• Average Volume (3M): 60.52K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.10
• Revenue Growth: -5.26%
• EPS Growth: -44.78%
• Country: US
• Employees: 2,089
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): -2.67
• Shares Outstanding: 16,668,520
• 10 Day Avg. Volume: 58,110
• 30 Day Avg. Volume: 60,522
• PEG Ratio: >-0.01
• Price to Book (P/B): -0.11
• Price to Sales (P/S): 0.08
• P/FCF Ratio: -0.63
• Enterprise Value/Market Cap: 189.21
• Enterprise Value/Revenue: 2.82
• Enterprise Value/Gross Profit: 10.39
• Enterprise Value/Ebitda: -47.12
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 39 Underperform
• Price Target: $0.51 ▲(20.95% Upside)

Fat Brands is experiencing severe financial distress, with significant leverage and negative equity. Technical indicators suggest a bearish trend, and valuation metrics highlight unprofitability. While the earnings call provided some positive strategic insights, the overall financial condition remains precarious, further exacerbated by recent corporate events indicating potential bankruptcy risks.

Positive Factors

Strategic Expansion

The commitment to open new locations signals a robust expansion strategy, potentially increasing market share and revenue streams.

Manufacturing Expansion

The manufacturing facility's high margin and potential for expansion could boost profitability and operational efficiency.

Legal Resolutions

Resolving legal issues reduces uncertainty and potential liabilities, allowing management to focus on strategic growth initiatives.

Negative Factors

High Leverage

High leverage poses financial risks and limits flexibility, potentially hindering long-term investment and growth opportunities.

Revenue Decline

Declining revenue reflects challenges in maintaining sales growth, which can impact profitability and market competitiveness.

Financial Distress

Financial distress and potential bankruptcy proceedings threaten operational continuity and investor confidence, impacting future viability.

Fat Brands Business Overview & Revenue Model

Company Description

Fat Brands Inc. is a multi-brand restaurant company based in the United States, known for its diverse portfolio of restaurant chains that includes iconic brands such as Johnny Rockets, Buffalo's Cafe, and Fatburger. The company operates in the food and beverage sector, primarily focusing on the fast-casual and quick-service restaurant segments. Fat Brands aims to expand its footprint through both franchising and company-owned locations, providing a range of menu offerings from burgers and wings to milkshakes and salads.

How the Company Makes Money

Fat Brands generates revenue through multiple streams, primarily from franchise fees and royalties from its franchised locations. The company charges franchisees an initial franchise fee and ongoing royalties based on a percentage of sales. Additionally, Fat Brands earns income from company-owned restaurants, where it retains the full revenue from food and beverage sales. The company also benefits from strategic partnerships and collaborations, which can include joint marketing efforts and co-branding initiatives that enhance brand visibility and drive sales. Moreover, Fat Brands may engage in real estate transactions, such as leasing properties to franchisees, contributing to its overall earnings. The company's expansion strategy, including acquisitions of other restaurant brands, further diversifies its revenue sources and strengthens its market presence.

Fat Brands Financial Statement Overview

Summary

Fat Brands is facing significant financial challenges across all verticals. The income statement shows persistent losses and declining revenue growth. The balance sheet is highly leveraged with negative equity, posing financial risks. Cash flow remains negative, indicating ongoing cash burn. The company needs to address these issues to improve its financial health and stability.

Income Statement

Fat Brands has faced significant challenges in its income statement, with negative net income and declining revenue growth. The TTM data shows a negative net profit margin of -32.39%, indicating substantial losses. The gross profit margin is 32.32%, which is relatively low for the industry. Revenue growth has been negative, reflecting a contraction in sales. Overall, the company is struggling with profitability and revenue growth.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of -2.78, indicating significant leverage and financial risk. Stockholders' equity is negative, which is concerning for financial stability. The return on equity is extremely high at 98.57%, but this is due to the negative equity, which distorts the metric. Overall, the balance sheet shows high leverage and financial instability.

Cash Flow

Cash flow analysis shows negative operating cash flow and free cash flow, indicating cash burn. The free cash flow to net income ratio is 1.29, suggesting that free cash flow is less negative than net income. However, the operating cash flow to net income ratio is negative, highlighting cash flow challenges. Despite a slight improvement in free cash flow growth, the overall cash flow position remains weak.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	577.50M	592.65M	480.46M	407.22M	118.88M	18.12M
Gross Profit	156.45M	150.42M	149.95M	185.60M	56.67M	12.90M
EBITDA	-34.51M	-12.82M	52.30M	14.49M	2.41M	-8.83M
Net Income	-212.33M	-189.85M	-90.11M	-126.19M	-31.58M	-14.86M
Balance Sheet
Total Assets	1.25B	1.29B	1.39B	1.21B	1.27B	121.14M
Cash, Cash Equivalents and Short-Term Investments	7.65M	23.38M	37.04M	28.67M	56.66M	3.94M
Total Debt	1.49B	1.47B	1.38B	1.12B	1.01B	97.92M
Total Liabilities	1.79B	1.74B	1.64B	1.37B	1.29B	163.03M
Stockholders Equity	-536.46M	-455.71M	-255.86M	-159.18M	-21.66M	-41.88M
Cash Flow
Free Cash Flow	-69.17M	-79.05M	-57.11M	-70.57M	-9.74M	-11.94M
Operating Cash Flow	-53.76M	-56.25M	-35.61M	-47.40M	682.00K	-11.48M
Investing Cash Flow	-10.72M	-26.47M	-59.80M	-12.50M	-723.20M	-36.58M
Financing Cash Flow	35.28M	58.20M	118.55M	28.74M	815.23M	55.24M

Fat Brands Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.42
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FAT, the sentiment is Negative. The current price of 0.42 is below the 20-day moving average (MA) of 0.49, below the 50-day MA of 1.17, and below the 200-day MA of 2.08, indicating a bearish trend. The MACD of -0.20 indicates Negative momentum. The RSI at 22.22 is Positive, neither overbought nor oversold. The STOCH value of 10.48 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FAT.

Fat Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RAVE	76 Outperform	$40.50M	15.13	20.05%	―	0.35%	9.25%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
BDL	56 Neutral	$52.04M	10.34	7.97%	1.95%	8.99%	49.97%
GTIM	51 Neutral	$13.61M	10.67	3.85%	―	1.84%	12.10%
NDLS	45 Neutral	$30.58M	-0.63	―	―	-0.35%	-37.02%
ARKR	40 Underperform	$21.71M	-1.95	-29.84%	―	-9.70%	-194.23%
FAT	39 Underperform	$8.59M	-0.03	―	724.22%	-5.26%	-44.78%

Fat Brands Corporate Events

Fat Brands Faces Financial Strain After Acceleration Notice

On November 25, 2025, FAT Brands Inc. received an acceleration notice from UMB Bank regarding the FB Resid Notes, declaring the outstanding principal and interest immediately due. This financial strain, due to an event of default declared earlier in November, could significantly impact the company’s financial condition and may lead to bankruptcy proceedings. Additionally, James Ellis resigned as a director of the company and its subsidiary for personal reasons, not due to any disagreements with the company’s operations.

FAT Brands Faces Financial Distress Amid Acceleration Notices

FAT Brands Inc. recently faced financial challenges as it received default notices under its base indentures for five special purpose financing subsidiaries. On November 17, 2025, the company received acceleration notices from UMB Bank for four of these subsidiaries, declaring the outstanding principal and accrued interest immediately due. The total principal outstanding is approximately $1,256.5 million, with accrued interest of $43.2 million. The company lacks the funds to cover these amounts, which could lead to significant financial distress, including potential bankruptcy proceedings. FAT Brands is in discussions with noteholders for possible refinancing or restructuring but has not reached any agreements yet.

Fat Brands Engages in Confidential Refinancing Talks

On or about September 29, 2025, FAT Brands Inc. entered into a confidentiality agreement with certain holders of notes issued by its subsidiaries. This agreement was intended to facilitate discussions regarding potential refinancing or restructuring transactions. However, no agreement has been reached with the holders at this time. The company has disclosed certain confidential information to satisfy its obligations under the confidentiality agreement.

FAT Brands Reports Q3 2025 Financial Results

On November 5, 2025, FAT Brands reported its financial results for the third quarter of 2025, highlighting a strong performance in its casual dining segment with a 3.9% growth in same-store sales. Despite a 2.3% decline in total revenue to $140 million and a net loss of $58.2 million, the company is focusing on strategic expansion and co-branding initiatives, which have shown promising results. FAT Brands is also working on debt restructuring and equity raising to strengthen its financial position, aiming for positive cash flow in future quarters.

Fat Brands Settles Derivative Lawsuits with Stockholders

On August 1, 2025, FAT Brands Inc. reached a settlement agreement with its stockholders to resolve two derivative lawsuits filed in 2021 and 2022 related to a merger and recapitalization. The settlement involves corporate governance changes and a $10 million payment by the company’s insurers, with additional contributions of shares from Fog Cutter Holdings LLC. This agreement, pending court approval, will dismiss all claims without attributing liability to the defendants, potentially stabilizing the company’s governance and financial standing.