Nathan's Famous (NATH) AI Stock Analysis

• Market Cap: $370.31M
• Dividend Yield: 2.21%
• Average Volume (3M): 12.31K
• Price to Earnings (P/E): 15.6
• Beta (1Y): 0.70
• Revenue Growth: 6.83%
• EPS Growth: 24.77%
• Country: US
• Employees: 147
• Sector: Consumer Cyclical
• Sector Strength: 61
• Industry: Restaurants
• EPS (TTM): 5.79
• Shares Outstanding: 4,089,510
• 10 Day Avg. Volume: 8,762
• 30 Day Avg. Volume: 12,310
• PEG Ratio: 0.63
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.63
• Price to Cash Flow (P/CF): 26.60
• P/FCF Ratio: 22.70
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

Nathan's Famous displays robust financial performance with strong revenue and cash flow growth, although its balance sheet presents some financial risk due to high leverage and negative equity. Technically, the stock shows strong upward momentum, but caution is advised due to overbought conditions. Valuation is moderate with a reasonable P/E ratio and an attractive dividend yield. Overall, the company is in a favorable position but needs to address balance sheet weaknesses.

Nathan's Famous Business Overview & Revenue Model

Company Description

Nathan's Famous, Inc., together with its subsidiaries, operates in the foodservice industry. The company owns and franchises restaurants under the Nathan's Famous brand name, as well as sells products bearing the Nathan's Famous trademarks through various channels of distribution. It also has license agreements for the manufacture, distribution, marketing, and sale of Nathan's Famous branded hot dogs, sausages, and corned beef products in refrigerated consumer packages to be resold through retail channels, such as supermarkets, groceries, mass merchandisers, and club stores; and other Nathan's Famous branded refrigerated meat products in consumer packages to be resold through retail channels. In addition, the company has license agreements to manufacture Nathan's Famous branded hot dog and sausage products in bulk for use in the food service industry; for supplying Nathan's Famous natural casing and skinless hot dogs in bulk for use in the Nathan's Famous restaurant system; to manufacture proprietary spices; to produce and distribute sauerkraut and pickles; to produce and sell French fries and onion rings for retail sale; and to produce and sell miniature bagel dogs, franks-in-a-blanket, mozzarella sticks, and other hors d'oeuvres through club stores, supermarkets, and other retail food stores. Further, the company sells Nathan's products directly to foodservice operators or to various foodservice distributors, as well as provides Arthur Treacher's brand fish fillets. As of March 27, 2022, its restaurant system consisted of four company-owned units in the New York City metropolitan area; and 239 franchised units in 18 states and 12 foreign countries. Nathan's Famous, Inc. was founded in 1916 and is based in Jericho, New York.

How the Company Makes Money

Nathan's Famous generates revenue through multiple streams, primarily from the sale of its branded food products in various venues. This includes revenue from franchised and company-owned restaurant operations, which serve their signature hot dogs and other menu items. Additionally, the company earns significant income through licensing agreements, allowing third-party manufacturers and retailers to produce and sell Nathan's Famous branded products in supermarkets and other retail outlets. These licensing deals involve royalties based on product sales. Furthermore, Nathan's Famous benefits from strategic partnerships and marketing initiatives that enhance brand visibility and drive sales across its distribution channels.

Nathan's Famous Financial Statement Overview

Summary

Nathan's Famous demonstrates strong revenue and profit growth, with commendable operational efficiency reflected in its income statement. Despite high leverage and negative equity position posing financial risks, the company shows resilience through its strong cash flow generation. Overall, the financial position is favorable, but attention should be given to improving the balance sheet strength.

Income Statement

Nathan's Famous has shown impressive revenue growth, with a 27.5% increase from the previous year, indicating a strong upward trajectory. The gross profit margin is robust at 36.4%, reflecting efficient cost management. Furthermore, the net profit margin increased to 16.2%, showcasing enhanced profitability. EBIT and EBITDA margins are solid, at 25.2% and 26.0% respectively, demonstrating strong operational performance.

Balance Sheet

The company's balance sheet exhibits high leverage, with a concerning negative equity position. The debt-to-equity ratio cannot be computed due to negative equity, highlighting financial risk. However, the company has managed to decrease its total debt over the year, which is a positive sign. The equity ratio is negative due to the negative stockholders' equity.

Cash Flow

Nathan's Famous has displayed strong cash flow performance with a 25% growth in free cash flow. The operating cash flow is robust and significantly exceeds net income, indicating good cash generation ability. The free cash flow to net income ratio is high, underscoring efficient capital management and excellent cash conversion.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
146.39M	138.61M	130.78M	114.88M	75.84M	103.33M
	Gross Profit
53.29M	49.25M	49.64M	44.06M	38.74M	43.18M
	EBIT
36.93M	32.51M	34.45M	29.86M	25.52M	27.17M
	EBITDA
38.09M	33.94M	35.68M	29.73M	27.11M	29.85M
	Net Income Common Stockholders
23.70M	19.62M	19.62M	13.60M	11.07M	13.44M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
35.93M	21.03M	29.86M	50.06M	81.06M	77.12M
	Total Assets
53.37M	48.86M	58.61M	78.52M	108.81M	105.28M
	Total Debt
0.00	66.39M	86.24M	116.52M	156.22M	156.25M
	Net Debt
-11.61M	45.36M	56.38M	66.46M	75.16M	79.14M
	Total Liabilities
9.06M	81.78M	103.17M	133.50M	171.29M	171.68M
	Stockholders Equity
44.31M	-32.92M	-44.56M	-54.99M	-62.48M	-66.40M
Cash Flow		Free Cash Flow
24.61M	19.69M	19.21M	15.84M	11.21M	11.48M
	Operating Cash Flow
24.86M	20.00M	19.84M	16.48M	11.77M	12.35M
	Investing Cash Flow
-241.00K	-313.00K	-584.00K	-636.00K	-551.00K	-870.00K
	Financing Cash Flow
-13.12M	-28.52M	-39.45M	-46.84M	-7.27M	-9.81M

Nathan's Famous Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 90.55
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NATH, the sentiment is Negative. The current price of 90.55 is below the 20-day moving average (MA) of 94.06, below the 50-day MA of 92.86, and above the 200-day MA of 81.67, indicating a neutral trend. The MACD of 0.47 indicates Positive momentum. The RSI at 54.96 is Neutral, neither overbought nor oversold. The STOCH value of 76.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NATH.

Nathan's Famous Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCD	76 Outperform	$214.42B	26.35	-216.57%	2.29%	1.67%	-1.61%
YUM	73 Outperform	$41.26B	28.35	-19.43%	1.84%	6.68%	-7.09%
NATH	71 Outperform	$370.31M	15.63	-102.54%	2.21%	6.83%	24.77%
SHAK	68 Neutral	$3.34B	333.87	2.23%	―	15.18%	-48.78%
WEN	64 Neutral	$2.67B	14.07	68.30%	7.52%	2.98%	-2.58%
Sector *	59 Neutral	$11.22B	10.13	-1.22%	3.96%	1.32%	-18.57%