Fat Brands (FAT) AI Stock Analysis

• Market Cap: $43.05M
• Dividend Yield: 433.33%
• Average Volume (3M): 61.30K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.63
• Revenue Growth: 10.63%
• EPS Growth: -93.67%
• Country: US
• Employees: 2,089
• Sector: Consumer Cyclical
• Sector Strength: 57
• Industry: Restaurants
• EPS (TTM): -2.32
• Shares Outstanding: 16,550,997
• 10 Day Avg. Volume: 33,790
• 30 Day Avg. Volume: 61,303
• PEG Ratio: >-0.01
• Price to Book (P/B): -0.32
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -0.72
• Enterprise Value/Market Cap: 26.50
• Enterprise Value/Revenue: 0.50
• Enterprise Value/Gross Profit: 7.26
• Enterprise Value/Ebitda: 11.00
• 1Y Price Target: $12.50
• Price Target Upside: 408.13% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 45 Neutral
• Price Target: $2.50 ▲(1.63%Upside)

Fat Brands' overall score is primarily impacted by its financial instability and valuation concerns, despite technical neutrality and ambitious expansion plans highlighted in the earnings call. The company's high leverage and negative earnings create significant risk.

Fat Brands Business Overview & Revenue Model

Company Description

FAT Brands Inc., a multi-brand franchising company, acquires, develops, and manages quick service, fast casual, casual dining, and polished casual dining restaurant concepts worldwide. As of August 22, 2022, it owned seventeen restaurant brands, including Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli's, Twin Peaks, Great American Cookies, Hot Dog on a Stick, Buffalo's Cafe and Buffalo's Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean, and Ponderosa Steakhouse/Bonanza Steakhouse, as well as franchises and owns approximately 2,300 locations. The company was incorporated in 2017 and is headquartered in Beverly Hills, California. FAT Brands Inc. operates as a subsidiary of Fog Cutter Holdings, LLC.

How the Company Makes Money

FAT Brands makes money primarily through franchise fees, royalties, and sales of food and beverage products. The company generates revenue by allowing independent operators to open and run restaurants under its various brand names, charging initial franchise fees and ongoing royalties based on a percentage of sales. Additionally, FAT Brands benefits from supply chain arrangements by coordinating the purchase and distribution of key ingredients and products to its franchisees, earning additional revenue in the process. Strategic acquisitions of complementary restaurant brands also play a vital role in broadening its portfolio and enhancing revenue growth.

Fat Brands Financial Statement Overview

Summary

Fat Brands exhibits strong revenue growth but is hindered by significant profitability and cash flow issues. The balance sheet is highly leveraged, raising financial risk and instability concerns.

Income Statement

Fat Brands has shown significant revenue growth over the years, especially from 2020 to 2024. However, the company struggles with profitability as indicated by negative EBIT and net income figures. The gross profit margin is reasonable, but the net profit margin remains deeply negative, suggesting persistent challenges in controlling costs and achieving operational efficiency.

Balance Sheet

The balance sheet indicates a high debt-to-equity ratio due to negative stockholders' equity, which is a significant risk factor. The company's equity ratio is also negative, implying more liabilities than assets. This financial structure reflects a highly leveraged position, suggesting financial instability and potential difficulty in meeting long-term obligations.

Cash Flow

Cash flow analysis shows consistent negative operating and free cash flows, highlighting liquidity issues. The operating cash flow to net income ratio is skewed by negative net income, indicating operational challenges. Despite financing activities providing some cash inflow, the company's cash flow position remains weak, with potential risks in sustaining operations without external funding.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	592.65M	480.46M	407.22M	118.88M	18.12M
Gross Profit	150.42M	197.57M	140.99M	56.67M	14.29M
EBITDA	-12.82M	52.30M	21.51M	824.00K	-8.83M
Net Income	-189.85M	-90.11M	-126.19M	-31.58M	-14.86M
Balance Sheet
Total Assets	1.29B	1.39B	1.21B	1.27B	121.14M
Cash, Cash Equivalents and Short-Term Investments	23.38M	37.04M	28.67M	56.66M	3.94M
Total Debt	1.47B	1.38B	1.12B	1.01B	97.92M
Total Liabilities	1.74B	1.64B	1.37B	1.29B	163.03M
Stockholders Equity	-455.71M	-255.86M	-159.18M	-21.66M	-41.88M
Cash Flow
Free Cash Flow	-79.05M	-57.11M	-70.57M	-9.74M	-11.94M
Operating Cash Flow	-56.25M	-35.61M	-47.40M	682.00K	-11.48M
Investing Cash Flow	-26.47M	-59.80M	-12.50M	-723.20M	-36.58M
Financing Cash Flow	58.20M	118.55M	28.74M	815.23M	55.24M

Fat Brands Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2.46
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FAT, the sentiment is Neutral. The current price of 2.46 is below the 20-day moving average (MA) of 2.47, below the 50-day MA of 2.52, and below the 200-day MA of 2.88, indicating a bearish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 50.63 is Neutral, neither overbought nor oversold. The STOCH value of 47.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FAT.

Fat Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RAVE	73 Outperform	$38.80M	14.96	21.75%	―	2.93%	20.81%
BDL	71 Outperform	$53.90M	13.31	6.48%	1.90%	9.38%	14.76%
Sector *	62 Neutral	$16.65B	11.30	-7.38%	3.01%	1.59%	-23.30%
RRGB	58 Neutral	$114.40M	―	92.02%	―	-1.68%	-140.83%
ARKR	50 Neutral	$32.60M	―	-22.57%	2.07%	-3.61%	-36.65%
FAT	45 Neutral	$43.05M	―	38.50%	433.33%	10.63%	-93.67%
NDLS	40 Underperform	$32.63M	―	-978.37%	―	-0.61%	-200.32%

Fat Brands Corporate Events

Fat Brands Reports Q1 2025 Financial Results

On May 8, 2025, FAT Brands reported its financial results for the first quarter of 2025, highlighting a 6.5% decline in total revenue to $142.0 million compared to the previous year. Despite the revenue drop, the company opened 23 new locations, marking a 37% increase from the previous year, and continued its international expansion with new agreements in France. The strategic spin-off of Twin Hospitality Group Inc. provided a $50 million dividend to shareholders, and the company is advancing towards a nearly 100% franchised model with plans to refranchise 57 Fazoli’s restaurants.

Fat Brands Announces Leadership Transition with New Co-CEO

On April 29, 2025, FAT Brands Inc. announced the transition of Robert Rosen from Co-Chief Executive Officer to a consulting role, with Taylor Wiederhorn stepping in as the new Co-CEO alongside Kenneth Kuick. This leadership change is expected to leverage Wiederhorn’s extensive experience in franchise development and strategic growth, while Rosen will continue to contribute to the company’s financial strategies in a consulting capacity.