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GEN Restaurant Group, Inc. Class A (GENK)
NASDAQ:GENK
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GEN Restaurant Group, Inc. Class A
(NASDAQ:GENK)
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Rating:41Neutral
Price Target:
$2.00
▼(-4.76% Downside)
GEN Restaurant Group's overall stock score is primarily impacted by its financial performance, which shows strong revenue growth but significant profitability and cash flow challenges. Technical analysis indicates bearish momentum, and valuation metrics reflect current unprofitability. While expansion efforts are promising, they are overshadowed by financial strains.
Positive Factors
Top-line Revenue Growth
Sustained high revenue growth and management's targeted $250M run rate indicate strong product-market fit and scalable demand across concepts. Over 2–6 months this supports investment in operations and margin leverage if cost control and unit economics improve.
Grocery/Retail Channel Launch
Entering grocery retail creates a durable, lower-fixed-cost revenue stream and diversifies sales beyond restaurants. A $100M+ multi-year revenue target materially reduces single-channel risk and can boost gross margins via branded packaged goods over the medium term.
International Expansion & Brand Distribution
Lower-cost international units and wide gift-card distribution demonstrate scalable brand recognition and lower unit development costs overseas. These channels can sustainably expand AUV and diversify geographic risk, aiding long-term revenue resilience.
Negative Factors
High Leverage
Extremely high leverage and negative ROE constrain financial flexibility and increase refinancing and interest risks. Over several months this can limit funding for expansion, pressure liquidity during downturns, and elevate insolvency risk if cash generation doesn't improve.
Negative Free Cash Flow
Persistent negative free cash flow and weak operating cash conversion indicate the business burns cash despite revenue growth. This undermines ability to fund openings and retail initiatives internally and increases reliance on external financing over the next 2–6 months.
Weak Margins and Same-Store Sales Pressure
Low gross and negative net margins plus declining same-store sales and falling restaurant-level EBITDA reflect structural margin pressure from costs and traffic declines. Without sustained margin improvement, profitability and unit economics remain fragile over the medium term.
GEN Restaurant Group, Inc. Class A (GENK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$69.16M
Dividend Yield1.27%
Average Volume (3M)63.36K
Price to Earnings (P/E)―
Beta (1Y)1.16
Revenue Growth9.36%
EPS Growth-249.08%
CountryUS
Employees289
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)-0.02
Shares Outstanding5,249,566
10 Day Avg. Volume57,604
30 Day Avg. Volume63,364
Financial Highlights & Ratios
PEG Ratio0.94
Price to Book (P/B)2.74
Price to Sales (P/S)0.17
P/FCF Ratio-5.82
Enterprise Value/Market Cap3.38
Enterprise Value/Revenue1.08
Enterprise Value/Gross Profit11.30
Enterprise Value/Ebitda46.90
Forecast
1Y Price Target
$4.50Price Target Upside114.29% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
GEN Restaurant Group, Inc. Class A Business Overview & Revenue Model
Company DescriptionGEN Restaurant Group, Inc. operates restaurants in California, Arizona, Hawaii, Nevada, New York, and Texas. Its restaurants specialize in various flavored meats for Korean barbeque. The company was founded in 2011 and is based in Cerritos, California.
How the Company Makes MoneyGEN Restaurant Group generates revenue through multiple streams, primarily from the sale of food and beverages across its various restaurant concepts. Each location operates under a unique brand identity, allowing for targeted marketing and customer engagement. The company also benefits from strategic partnerships with suppliers and distributors, enabling cost-effective procurement of high-quality ingredients. Additionally, GENK may generate income through catering services, special events, and franchise operations, further diversifying its revenue sources. Seasonal promotions, loyalty programs, and collaborations with local businesses can also enhance customer retention and drive sales growth.
GEN Restaurant Group, Inc. Class A Earnings Call Summary
Earnings Call Date:Nov 07, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 05, 2026
Earnings Call Sentiment Neutral
While GEN Restaurant Group shows strong expansion efforts and growth initiatives, significant challenges in same-store sales decline, increased costs, and a net loss overshadow these achievements. The international and grocery store expansion initiatives are promising, but current financial strains and market conditions present considerable hurdles.Q3-2025 Updates
Positive Updates
Expansion and Growth Initiatives
GEN Restaurant Group opened 15 new restaurants in the first 9 months of 2025, exceeding their initial estimate, with a total of 17 stores planned for the year. They also launched ready-to-cook Korean branded meats in over 600 grocery stores, expecting significant revenue growth from this initiative.
International Expansion
Opened 6 new restaurants in South Korea, which operate at a fraction of the construction and operational costs compared to U.S. locations.
Gift Card Sales Success
Strong sales of gift cards at 95 Costco locations and 92 Sam's Club locations, showcasing GEN's brand strength.
Labor Efficiency
Achieved a decrease in payroll and benefits as a percentage of company restaurant sales by 196 basis points compared to the third quarter of the previous year.
Negative Updates
Same-Store Sales Decline
Same-store sales dropped by 9.9% for the third quarter due to reduced customer traffic after global tariffs were announced.
Increased Costs and Net Loss
Net loss before income taxes of $3.9 million for the third quarter, reflecting higher costs associated with new restaurant development and inflationary pressures.
Decreased Restaurant-Level Adjusted EBITDA
Restaurant-level adjusted EBITDA decreased to 15% of total revenue compared to 18.2% in the third quarter of 2024.
High Construction Costs
Opening new stores in the U.S. costs approximately $2.5 million each, impacting profitability.
Company Guidance
During the GEN Restaurant Group's 3Q 2025 earnings call, the company provided detailed guidance on its financial and operational performance. They reported a 2.7% year-over-year increase in total revenue to $50.4 million, despite a 9.9% drop in same-store sales, attributing this to macroeconomic pressures and a downturn in restaurant customer traffic. The company highlighted its expansion efforts, having opened 15 new restaurants in 2025, exceeding their initial estimate, with a total of 57 restaurants now in operation, including 6 in South Korea. The average unit volume (AUV) revenue was reported at $5.2 million per restaurant. GEN's new grocery store initiative, featuring ready-to-cook branded meats, is anticipated to generate over $100 million in annual revenue over the next 4 to 5 years. The company also discussed financial metrics such as a 15% restaurant-level adjusted EBITDA margin and a net loss before income taxes of $3.9 million. They projected full-year revenue of $220 million to $225 million, with a targeted annual run rate of approximately $250 million by the end of 2025.GEN Restaurant Group, Inc. Class A Financial Statement Overview
Summary
GEN Restaurant Group shows strong revenue growth but faces significant challenges in profitability and cash flow. High leverage and negative returns on equity present financial stability risks.Income Statement
GEN Restaurant Group's income statement shows mixed performance. The TTM (Trailing-Twelve-Months) data indicates a significant revenue growth rate of 60.7%, suggesting strong top-line expansion. However, profitability metrics such as the gross profit margin (8.87%) and net profit margin (-0.34%) are weak, indicating challenges in cost management and achieving profitability. The negative EBIT margin (-2.05%) further highlights operational inefficiencies.45
Neutral
Balance Sheet
The balance sheet reveals high leverage with a debt-to-equity ratio of 11.38, indicating significant reliance on debt financing. The negative return on equity (-5.64%) suggests that the company is not generating sufficient returns on shareholders' investments. The equity ratio is low, reflecting a small proportion of equity in the company's capital structure, which could pose financial stability risks.30
Negative
Cash Flow
Cash flow analysis shows a concerning trend with negative free cash flow and a free cash flow to net income ratio of -1.24, indicating cash outflows exceeding earnings. The operating cash flow to net income ratio of 0.38 suggests moderate cash generation relative to net income, but the negative free cash flow growth rate highlights potential liquidity challenges.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 217.45M | 208.38M | 181.01M | 163.73M | 140.56M | 62.66M |
| Gross Profit | 20.71M | 21.92M | 24.61M | 27.61M | 28.14M | 462.00K |
| EBITDA | 4.99M | 18.96M | 21.61M | 19.47M | 57.88M | -3.71M |
| Net Income | -1.33M | 592.00K | 8.41M | 10.28M | 49.86M | -9.27M |
Balance Sheet | ||||||
| Total Assets | 245.54M | 240.41M | 183.87M | 138.88M | 53.84M | 33.13M |
| Cash, Cash Equivalents and Short-Term Investments | 4.79M | 23.68M | 32.63M | 11.20M | 9.89M | 7.15M |
| Total Debt | 175.54M | 163.01M | 123.77M | 126.08M | 14.90M | 22.63M |
| Total Liabilities | 207.45M | 196.30M | 147.85M | 145.64M | 43.14M | 40.30M |
| Stockholders Equity | 13.92M | 12.73M | 7.47M | -10.01M | 8.89M | -8.04M |
Cash Flow | ||||||
| Free Cash Flow | -18.52M | -6.00M | 5.01M | 15.29M | 38.52M | -2.34M |
| Operating Cash Flow | 11.15M | 17.83M | 22.16M | 23.40M | 39.80M | -2.05M |
| Investing Cash Flow | -26.67M | -26.80M | -6.31M | 2.57M | -18.53M | -4.09M |
| Financing Cash Flow | -1.82M | 18.00K | 5.58M | -24.66M | -18.54M | 6.61M |
GEN Restaurant Group, Inc. Class A Technical Analysis
Negative
2.10
Price Trends
2.35
Negative
2.63
Negative
3.24
Negative
Market Momentum
-0.10
Positive
39.39
Neutral
14.81
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GENK, the sentiment is Negative. The current price of 2.1 is below the 20-day moving average (MA) of 2.31, below the 50-day MA of 2.35, and below the 200-day MA of 3.24, indicating a bearish trend. The MACD of -0.10 indicates Positive momentum. The RSI at 39.39 is Neutral, neither overbought nor oversold. The STOCH value of 14.81 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GENK.
GEN Restaurant Group, Inc. Class A Risk Analysis
GEN Restaurant Group, Inc. Class A disclosed 67 risk factors in its most recent earnings report. GEN Restaurant Group, Inc. Class A reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
GEN Restaurant Group, Inc. Class A Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $46.47M | 15.97 | 20.05% | ― | 0.35% | 9.25% | |
62 Neutral | $60.41M | 12.00 | 7.97% | 1.89% | 8.99% | 49.97% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
48 Neutral | $60.97M | -0.54 | -51.90% | ― | 51.57% | -367.14% | |
43 Neutral | $30.18M | -0.56 | ― | ― | -0.35% | -37.02% | |
41 Neutral | $69.16M | -7.38 | -8.89% | 1.27% | 9.36% | -249.08% | |
41 Neutral | $66.47M | -1.09 | ― | ― | -3.61% | 2.06% |
* Consumer Cyclical Sector Average
GENK
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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.