Good Times Restaurants (GTIM) AI Stock Analysis

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Good Times Restaurants

(NASDAQ:GTIM)

61Neutral

Good Times Restaurants' overall stock score reflects a balance of improving financial performance and challenging technical indicators. Key strengths include a positive trend in profitability and stable cash flows, but technical analysis points to bearish sentiment. The stock's valuation suggests potential undervaluation, but recent earnings call highlights ongoing operational challenges, particularly for the Good Times brand.

Good Times Restaurants (GTIM) vs. S&P 500 (SPY)

Market Cap

$20.32M

Dividend YieldN/A

Average Volume (3M)18.01K

Price to Earnings (P/E)9.0

Beta (1Y)0.92

Revenue Growth5.55%

EPS Growth-76.32%

CountryUS

Employees2,110

SectorConsumer Cyclical

Sector Strength64

IndustryRestaurants

Share Statistics

EPS (TTM)0.21

Shares Outstanding10,640,569

10 Day Avg. Volume11,832

30 Day Avg. Volume18,010

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.18

Price to Cash Flow (P/CF)-12.40

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Good Times Restaurants Business Overview & Revenue Model

Company DescriptionGood Times Restaurants Inc. (GTIM) is a publicly traded company operating in the fast-food and casual dining sectors. The company is primarily known for its Good Times Burgers & Frozen Custard brand, which offers a variety of high-quality burgers, fresh chicken, and frozen custard treats. Additionally, GTIM operates the Bad Daddy's Burger Bar chain, which provides a full-service casual dining experience with a focus on gourmet burgers and craft beer. The company is committed to providing fresh, all-natural, and responsibly sourced ingredients in its menu offerings.

How the Company Makes MoneyGood Times Restaurants Inc. generates revenue primarily through the sale of food and beverages at its restaurant locations. The company operates both company-owned and franchised locations, with revenue streams coming from direct sales at company-owned restaurants and franchise fees and royalties from franchised locations. Key revenue drivers include menu innovation, customer experience, and brand loyalty. GTIM also benefits from strategic partnerships with suppliers to maintain quality and cost-efficiency, as well as marketing initiatives to drive brand awareness and customer engagement.

Good Times Restaurants Financial Statement Overview

Summary

Good Times Restaurants shows positive trends in income with improved profitability and stable financial health. Despite a healthy gross profit margin and increased net profit, a thin net profit margin and manageable debt level suggest room for improvement in profitability and leverage reduction.

Income Statement

Positive

Good Times Restaurants has shown positive trends in its income statement metrics. The TTM (Trailing-Twelve-Months) data indicates a gross profit margin of approximately 33.7%, which is healthy for the industry. The company successfully improved its net profit margin to around 1.6% TTM, up from a loss in previous years, showcasing a turnaround in profitability. Revenue growth has been steady, with a slight increase of 2.2% from the previous annual report period. The EBIT and EBITDA margins also reflect improved operational efficiency. However, the relatively thin net profit margin suggests room for further profitability improvements.

Balance Sheet

Positive

The balance sheet of Good Times Restaurants reveals a moderate level of financial stability. The debt-to-equity ratio stands at approximately 1.37, indicating a balanced but cautious approach to leverage. The company maintains a return on equity (ROE) of around 7.2% TTM, which is decent but could be improved for better shareholder returns. The equity ratio of approximately 36.2% suggests a reasonable level of equity financing supporting the total assets. While these metrics suggest stability, the company should monitor its leverage to avoid potential risks.

Cash Flow

Positive

The cash flow statements highlight a stable cash position for Good Times Restaurants. The operating cash flow to net income ratio is around 2.08 TTM, indicating efficient cash generation relative to reported earnings. The free cash flow growth rate has been positive, although it slowed in the recent TTM period, showing a slight decline in free cash flow. The free cash flow to net income ratio is also favorable at approximately 0.93. These metrics suggest that the company is managing its cash flows effectively, although there is room for enhancing free cash flow growth further.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
145.51M	142.31M	138.12M	138.20M	123.95M	109.86M
	Gross Profit
16.18M	15.79M	14.90M	16.67M	20.91M	15.46M
	EBIT
1.96M	1.38M	2.51M	-5.69M	6.86M	-4.82M
	EBITDA
5.70M	5.23M	4.71M	3.18M	26.18M	-3.70M
	Net Income Common Stockholders
2.33M	1.61M	11.09M	-927.00K	16.79M	-6.33M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
533.00K	3.85M	4.18M	8.91M	8.86M	11.45M
	Total Assets
9.44M	87.12M	91.09M	86.39M	93.68M	99.69M
	Total Debt
3.65M	43.59M	48.87M	50.97M	54.66M	75.56M
	Net Debt
3.12M	39.73M	44.69M	42.07M	45.80M	64.11M
	Total Liabilities
6.62M	54.03M	58.09M	58.60M	62.81M	84.71M
	Stockholders Equity
2.43M	32.37M	32.57M	27.79M	29.75M	14.98M
Cash Flow		Free Cash Flow
2.17M	5.13M	3.19M	2.65M	5.95M	5.77M
	Operating Cash Flow
4.86M	5.13M	7.96M	5.29M	9.14M	8.37M
	Investing Cash Flow
-5.06M	-3.66M	-10.44M	-2.62M	-3.19M	-2.60M
	Financing Cash Flow
-296.00K	-1.80M	-2.25M	-2.62M	-8.56M	2.94M

Good Times Restaurants Technical Analysis

Technical Analysis Sentiment

Negative

Last Price1.91

Price Trends

50DMA

2.31

Negative

100DMA

2.43

Negative

200DMA

2.60

Negative

Market Momentum

MACD

-0.13

Positive

RSI

36.97

Neutral

STOCH

23.87

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GTIM, the sentiment is Negative. The current price of 1.91 is below the 20-day moving average (MA) of 2.09, below the 50-day MA of 2.31, and below the 200-day MA of 2.60, indicating a bearish trend. The MACD of -0.13 indicates Positive momentum. The RSI at 36.97 is Neutral, neither overbought nor oversold. The STOCH value of 23.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GTIM.

Good Times Restaurants Risk Analysis

Good Times Restaurants disclosed 38 risk factors in its most recent earnings report. Good Times Restaurants 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

Good Times Restaurants Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RAVE	69 Neutral	$36.78M	13.80	21.44%	―	2.83%	37.01%
BDL	64 Neutral	$44.52M	13.68	5.48%	2.06%	8.87%	-5.22%
GTIM	61 Neutral	$20.32M	9.05	7.29%	―	5.55%	-76.32%
Sector *	60 Neutral	$6.85B	11.57	3.09%	4.18%	2.37%	-21.38%
ARKR	46 Neutral	$31.36M	―	-4.24%	8.58%	-2.05%	66.57%
NDLS	41 Neutral	$44.87M	―	-335.60%	―	-2.01%	-267.04%
FAT	34 Underperform	$47.66M	―	38.50%	22.40%	23.35%	-101.64%

* Consumer Cyclical Sector Average

Performance Comparison

GTIM

Good Times Restaurants

1.91

-0.87

-31.29%

ARKR

Ark Restaurants

8.70

-4.94

-36.22%

BDL

Flanigan's Enterprises

23.96

-2.03

-7.81%

RAVE

Rave Restaurant Group

2.50

0.43

20.77%

NDLS

Noodles & Co

0.98

-0.50

-33.78%

FAT

Fat Brands

2.68

-1.09

-28.91%

Good Times Restaurants Earnings Call Summary

Earnings Call Date: Feb 6, 2025 | % Change Since: -25.39% | Next Earnings Date: May 1, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mix of positive and negative aspects. While Bad Daddy's experienced growth in same-store sales and improved margins, both brands faced challenges due to weather, competitive pressures, and rising costs. Financial metrics showed some improvement, but the overall environment remains challenging.

Highlights

Increase in Same-Store Sales for Bad Daddy's

Bad Daddy's posted a 1.5% increase in same-store sales, along with improved restaurant-level margins.

Promising New Product Lines

Introduction and success of the classic smash patty burgers, along with future plans for new menu items, contributed to better margins.

Improved Labor Controls

Labor costs decreased by 70 basis points to 35.1% at Bad Daddy's, attributed to leveraging manager salaries and increased labor productivity.

Restaurant Sales Growth

Total restaurant sales increased by $2 million to $26.1 million for Bad Daddy's and $1.1 million to $9.9 million for Good Times compared to the previous year.

Positive Financial Metrics

Adjusted EBITDA increased to $1.2 million from $0.5 million, with a net income of $0.2 million compared to a loss in the previous year.

Lowlights

Weather Impact on Sales

Severe weather in January significantly reduced sales at Colorado restaurants and several Bad Daddy's locations in the Southeast.

Good Times Brand Challenges

Good Times faced ongoing challenges due to higher costs and competitive discounting, with same-store sales remaining flat.

Rising Costs and Inflation Impact

Increased costs in commodities, labor, and occupancy affected profitability, with expectations of continued ground beef cost increases.

Labor Cost Increase at Good Times

Total labor costs at Good Times rose to 36.7%, a 290 basis point increase from the previous year due to higher wage rates and decreased productivity.

Lower than Expected Sales for Limited-Time Offers

The Bambino Supremos and Dirty Sodas did not achieve the desired sales impact, although they developed a small loyal following.

Company Guidance

In the Good Times Restaurants Inc. Fiscal 2025 First Quarter Earnings Call, the company provided guidance on several key metrics, indicating a mixed performance across its brands. For Bad Daddy's, there was a 1.5% increase in same-store sales attributed to successful menu items like the classic smash patty burgers, which have been engineered to offer better margins. Despite a menu price increase of approximately 4.5%, the favorable mix shift towards smash patty burgers offset half of this rise. Bad Daddy's reported a total restaurant sales increase to $26.1 million, with a restaurant-level operating profit of $3.3 million or 12.6% of sales. Conversely, Good Times saw flat same-store sales with total restaurant sales rising to $9.9 million. However, the brand faced challenges with a 100 basis point increase in food and packaging costs and a 290 basis point rise in labor costs, leading to a decrease in restaurant-level operating profit to $0.9 million or 8.6% of sales. The call also highlighted the impact of weather on January sales, with Bad Daddy's experiencing a 5.5% decline in same-store sales and Good Times a 7% drop during the first four weeks of the second fiscal quarter. The company ended the quarter with $3 million in cash, $2.6 million in long-term debt, and a net income of $0.2 million or $0.02 per share, with adjusted EBITDA improving to $1.2 million.

Good Times Restaurants Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Good Times Restaurants Announces CEO Bonus Plan

Neutral

Feb 27, 2025

On February 25, 2025, Good Times Restaurants Inc. announced a new cash incentive bonus arrangement for its CEO, Ryan Zink. This arrangement, effective for the fiscal years 2025 to 2027, includes short-term and long-term incentives based on the company’s EBITDA performance. The plan aims to align executive compensation with company performance, potentially impacting the company’s financial strategies and stakeholder interests.

Executive/Board Changes

Good Times Restaurants Senior VP Announces Resignation

Neutral

Feb 21, 2025

On February 14, 2025, Donald L. Stack, Senior Vice President of Operations for the Good Times brand, announced his resignation effective May 31, 2025. His responsibilities will be divided between CEO Mr. Zink and Regional Manager Mr. Craig Soto, who will take on the new role of Director of Operations.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.