Fat Brands (FATAQ) AI Stock Analysis

• Market Cap: $5.79M
• Dividend Yield: 760.71%
• Average Volume (3M): 60.52K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.05
• 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: 255.86
• Enterprise Value/Revenue: 2.56
• Enterprise Value/Gross Profit: 9.47
• Enterprise Value/Ebitda: -42.93
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): -10.61
• Revenue Forecast (FY): $601.00M

• Rating: 42 Neutral
• Price Target: $0.28 ▲(7.69% Upside)
• Action: Upgraded Date: 01/28/26
• Date: Action: Upgraded 01/28/26

The score is primarily weighed down by weak financial performance (losses, negative equity, and negative cash flow) and bankruptcy-related corporate events. Technicals also remain bearish. Earnings call initiatives and cost actions provide only limited offset given ongoing debt and profitability challenges.

Positive Factors

Franchise scale and diversification

A diversified multi-brand franchise model with 2,200+ locations creates recurring royalty and fee income, low capital intensity per unit and geographic revenue diversification. This supports resilient cash flow generation and scalable growth if franchise economics remain sound.

High-margin manufacturing asset

Owning a production facility that already posts a high gross margin and runs below capacity provides a durable cost and margin advantage. Scaling utilization can materially improve consolidated gross margins, reduce supply costs for brands, and create a recurring B2B revenue stream.

Large committed development pipeline

A pipeline of 900 committed units and aggressive unit openings provides long-term royalty and initial franchise fee visibility. If executed, this produces steady recurring revenues, economies of scale across brands, and improved unit-level network effects for marketing and supply.

Negative Factors

Chapter 11 filing

Filing Chapter 11 materially alters capital structure and creditor priority, risking equity dilution or cancellation. Restructuring can constrain access to capital, disrupt supplier and franchisee relationships, and create prolonged operational uncertainty that impairs long-term execution.

Negative equity and high leverage

Negative shareholders' equity and extreme leverage indicate liabilities exceed assets, severely limiting financial flexibility. This elevates refinancing and default risk, increases likelihood of asset sales or dilutive capital raises, and constrains investment in growth initiatives.

Persistent cash burn and losses

Sustained negative operating and free cash flow with a -32.39% net margin signals ongoing cash burn that undermines internal funding for openings and capex. Reliance on external financing or restructuring raises execution risk for expansion and long-term viability.

Fat Brands Business Overview & Revenue Model

Company Description

FAT Brands Inc., a multi-brand restaurant franchising company, acquires, develops, markets, and manages quick service, fast casual, casual dining, and polished casual dining restaurant concepts in the United States, Canada, and internationally. It owns restaurant brands, including Round Table Pizza, Marble Slab Creamery, Great American Cookies, Hot Dog on a Stick, Pretzelmaker, Fazoli's, Fatburger, Johnny Rockets, Elevation Burger, Yalla Mediterranean, Buffalo's Cafe and Buffalo's Express, Hurricane Grill & Wings, Ponderosa Steakhouse/Bonanza Steakhouse, Native Grill & Wings, Smokey Bones, and Twin Peaks. 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. On January 26, 2026, FAT Brands Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas.

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

Weak fundamentals across statements: negative net margin (-32.39%) and declining revenue, negative equity with high leverage risk, and negative operating/free cash flow indicating ongoing cash burn.

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
Income Statement
Total Revenue
Gross Profit
EBITDA
Net Income
Balance Sheet
Total Assets
Cash, Cash Equivalents and Short-Term Investments
Total Debt
Total Liabilities
Stockholders Equity
Cash Flow
Free Cash Flow
Operating Cash Flow
Investing Cash Flow
Financing Cash Flow

Fat Brands Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.26
• 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 FATAQ, the sentiment is Negative. The current price of 0.26 is above the 20-day moving average (MA) of 0.23, below the 50-day MA of 0.31, and below the 200-day MA of 1.52, indicating a bearish trend. The MACD of -0.03 indicates Negative momentum. The RSI at 36.39 is Neutral, neither overbought nor oversold. The STOCH value of 45.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FATAQ.

Fat Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RAVE	78 Outperform	$41.92M	14.82	20.05%	―	0.35%	9.25%
BDL	64 Neutral	$60.90M	10.53	7.97%	1.89%	8.99%	49.97%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
GTIM	48 Neutral	$12.56M	12.21	3.85%	―	1.84%	12.10%
ARKR	46 Neutral	$24.97M	-1.82	-29.84%	―	-9.70%	-194.23%
NDLS	43 Neutral	$34.35M	-0.74	―	―	-0.35%	-37.02%
FATAQ	42 Neutral	$5.79M	-0.02	―	760.71%	-5.26%	-44.78%

Fat Brands Corporate Events

Fat Brands Initiates Chapter 11 Restructuring and Leadership Changes

On January 26, 2026, FAT Brands Inc. and its subsidiaries filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of Texas, aiming to deleverage their balance sheet, maximize stakeholder value and support continued growth of the company’s restaurant brands while continuing to operate locations as debtors-in-possession. On the same date, the board expanded from 14 to 15 members, appointing restructuring specialists Patrick Bartels and Neal Goldman as independent directors and forming a special committee to oversee restructuring, while also naming Huron Consulting Services’ John DiDonato as chief restructuring officer and Abhimanyu Gupta as deputy CRO; the company cautioned that trading in its securities is highly speculative during the proceedings and warned shareholders they may face a complete or significant loss depending on the outcome of the Chapter 11 cases.

The most recent analyst rating on (FAT) stock is a Hold with a $0.37 price target. To see the full list of analyst forecasts on Fat Brands stock, see the FAT Stock Forecast page.

Fat Brands Announces 2025 Annual Stockholder Meeting Results

On December 23, 2025, FAT Brands Inc. held its 2025 Annual Meeting of Stockholders, at which holders of Class A and Class B common stock voted together on three proposals, reflecting an aggregate 2,558,278,520 votes of outstanding common stock. Stockholders elected 13 directors to the board to serve until the 2026 Annual Meeting, following the prior resignation and withdrawn nomination of James Ellis, approved on an advisory basis the compensation of the company’s named executive officers, and ratified the appointment of Macias Gini & O’Connell, LLP as the independent registered public accounting firm for the fiscal year ending December 28, 2025, reinforcing continuity in governance, executive pay practices and audit oversight.

The most recent analyst rating on (FAT) stock is a Sell with a $0.51 price target. To see the full list of analyst forecasts on Fat Brands stock, see the FAT Stock Forecast page.

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.

The most recent analyst rating on (FAT) stock is a Hold with a $0.53 price target. To see the full list of analyst forecasts on Fat Brands stock, see the FAT Stock Forecast page.

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.

The most recent analyst rating on (FAT) stock is a Hold with a $0.50 price target. To see the full list of analyst forecasts on Fat Brands stock, see the FAT Stock Forecast page.

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.

The most recent analyst rating on (FAT) stock is a Buy with a $10.00 price target. To see the full list of analyst forecasts on Fat Brands stock, see the FAT Stock Forecast page.

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.

The most recent analyst rating on (FAT) stock is a Hold with a $1.50 price target. To see the full list of analyst forecasts on Fat Brands stock, see the FAT Stock Forecast page.