Nathan's Famous (NATH) AI Stock Analysis

• Market Cap: $411.82M
• Dividend Yield: 2.09%
• Average Volume (3M): 44.98K
• Price to Earnings (P/E): 19.3
• Beta (1Y): 0.61
• Revenue Growth: 7.81%
• EPS Growth: 4.58%
• Country: US
• Employees: 147
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 0.75
• Shares Outstanding: 4,094,405
• 10 Day Avg. Volume: 40,675
• 30 Day Avg. Volume: 44,980
• PEG Ratio: 0.74
• Price to Book (P/B): -23.85
• Price to Sales (P/S): 2.66
• P/FCF Ratio: 15.74
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: 2.81
• Enterprise Value/Gross Profit: 9.56
• Enterprise Value/Ebitda: 13.09
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: $113.00 ▲(23.19% Upside)
• Action: Reiterated Date: 02/06/26
• Date: Action: Reiterated 02/06/26

The score is led by strong operating profitability and high-quality free cash flow, supported by a favorable M&A catalyst that anchors value near the takeout price. Offsetting these positives is the structurally weak balance sheet (negative equity), with technicals supportive but showing signs of short-term overbought conditions.

Positive Factors

Free Cash Flow Conversion

High-quality cash generation with FCF roughly matching net income (≈0.98 TTM) indicates durable cash conversion. This supports reinvestment, franchise growth, and shareholder returns without heavy reliance on external financing, strengthening long-term operational flexibility.

Revenue & Profitability

Sustained revenue expansion and healthy net margins demonstrate scalable demand for the brand and efficient operations. Consistent profitability provides internal funding for growth and resilience versus peers, supporting durable cash flows and business model strength over the medium term.

Strategic Acquisition Support

Being acquired by a larger, vertically integrated food company promises scale, distribution and cost synergies, plus capital support. This structural tie-up can accelerate retail and packaged-product reach, improve margin leverage and stabilize operations under broader corporate resources.

Negative Factors

Negative Shareholders' Equity

A persistent negative equity position is a structural capital weakness that limits financial flexibility. It complicates leverage assessment, constrains borrowing capacity and makes funding large investments or weathering shocks more difficult, raising long-term balance sheet risk.

Margin Compression

Downward pressure on gross and operating margins versus prior periods suggests rising input costs or adverse mix. Continued compression would erode profitability and reduce reinvestment capacity, challenging sustained cash generation and competitive positioning over time.

Earnings per Share Decline

Negative EPS growth implies per-share profitability has weakened, which may reflect margin pressures, dilution or one-off items. Persisting EPS declines reduce retained earnings accumulation and weaken equity rebuilding prospects, exacerbating the company's structural capital constraints.

Nathan's Famous Business Overview & Revenue Model

Company Description

Nathan's Famous, Inc. is a renowned American fast-food restaurant chain primarily known for its hot dogs and fast-casual dining experience. Established in 1916, the company operates in the food service sector, offering a variety of products including hot dogs, hamburgers, french fries, and other classic American fare. Nathan's Famous is recognized not only for its iconic products but also for its association with the annual Nathan's Hot Dog Eating Contest, which enhances its brand visibility and cultural significance.

How the Company Makes Money

Nathan's Famous generates revenue through multiple streams. The primary source of income comes from its restaurant operations, including company-owned locations and franchises. Franchise fees and royalties contribute significantly to revenue as the company expands its brand footprint both domestically and internationally. Additionally, Nathan's Famous earns money through retail sales of its packaged food products, which are sold in grocery stores and other retail outlets. The brand also benefits from partnerships and sponsorships, particularly related to its annual hot dog eating contest, which boosts media exposure and customer engagement. Overall, the combination of franchise operations, retail sales, and promotional events forms the core of Nathan's revenue model.

Nathan's Famous Financial Statement Overview

Summary

Strong profitability and cash generation (income statement score 78; cash flow score 86) are meaningful positives, but they are offset by a weak balance sheet driven by persistently negative shareholders’ equity (balance sheet score 34), which reduces financial flexibility despite lower recent debt.

Income Statement

Revenue has expanded strongly over the past several years (from $75.8M in 2021 to $148.2M in FY2025), though TTM (Trailing-Twelve-Months) growth looks unusually high versus FY2025 and likely reflects a timing/comparison effect. Profitability remains a clear strength: FY2025 net margin was ~16.2% and TTM net margin ~13.6%, with solid operating profitability as well. The main weakness is margin compression over time (gross and operating margins are lower than 2021 levels), suggesting higher costs and/or less favorable mix.

Balance Sheet

The balance sheet is the key risk area due to persistently negative shareholders’ equity across all periods shown (including TTM), which weakens financial flexibility and makes leverage ratios less meaningful (debt-to-equity is negative). While total debt has come down materially from FY2022–FY2024 levels to $55.9M in FY2025 and just $6.7M in TTM, the negative equity position still stands out as a structural concern. Overall assets are relatively stable, but the capital structure remains the weak point.

Cash Flow

Cash generation is consistently strong and high quality. Operating cash flow and free cash flow closely track reported earnings (free cash flow to net income ~0.95–0.99 across periods; ~0.98 in TTM), indicating good conversion of profits into cash. Free cash flow has also grown meaningfully, especially in TTM (strong double-digit growth), supporting reinvestment and/or shareholder returns. A minor watch item is that operating cash flow coverage dipped below 1.0 in 2021, but it has been comfortably above 1.0 since then.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	157.78M	148.18M	138.61M	130.78M	114.88M	75.84M
Gross Profit	46.39M	51.98M	49.25M	49.64M	44.06M	38.74M
EBITDA	33.87M	37.82M	33.94M	35.68M	29.73M	27.11M
Net Income	21.45M	24.03M	19.62M	19.62M	13.60M	11.07M
Balance Sheet
Total Assets	50.94M	53.48M	48.86M	58.61M	78.52M	108.81M
Cash, Cash Equivalents and Short-Term Investments	24.55M	27.80M	21.03M	29.86M	50.06M	81.06M
Total Debt	55.30M	55.92M	66.39M	86.24M	116.52M	156.22M
Total Liabilities	66.21M	69.99M	81.78M	103.17M	133.50M	171.29M
Stockholders Equity	-15.27M	-16.51M	-32.92M	-44.56M	-54.99M	-62.48M
Cash Flow
Free Cash Flow	22.10M	25.02M	19.69M	19.21M	15.84M	11.21M
Operating Cash Flow	22.48M	25.24M	20.00M	19.84M	16.48M	11.77M
Investing Cash Flow	-386.00K	-225.00K	-313.00K	-584.00K	-636.00K	-551.00K
Financing Cash Flow	-21.26M	-18.24M	-28.52M	-39.45M	-46.84M	-7.27M

Nathan's Famous Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 91.73
• 50DMA: Positive
• 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 Positive. The current price of 91.73 is below the 20-day moving average (MA) of 100.66, below the 50-day MA of 96.88, and below the 200-day MA of 99.65, indicating a bullish trend. The MACD of 1.04 indicates Positive momentum. The RSI at 60.99 is Neutral, neither overbought nor oversold. The STOCH value of 28.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NATH.

Nathan's Famous Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NATH	73 Outperform	$411.82M	19.31	―	2.09%	7.81%	4.58%
LOCO	68 Neutral	$320.22M	12.34	9.63%	―	2.09%	12.10%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
PTLO	55 Neutral	$401.75M	19.08	5.82%	―	2.40%	-14.90%
DIN	54 Neutral	$441.94M	13.71	―	5.10%	6.47%	-62.84%
JACK	45 Neutral	$331.42M	-4.59	―	9.34%	-6.75%	-118.94%

Nathan's Famous Corporate Events

Nathan’s Famous agrees to all-cash acquisition by Smithfield

On January 20, 2026, Nathan’s Famous, Inc. agreed to be acquired by Smithfield Foods, Inc. in an all-cash merger valuing the hot dog maker at about $450 million, with Nathan’s shareholders to receive $102.00 per share and the company to become a wholly owned Smithfield subsidiary and cease public trading once customary regulatory and shareholder approvals, including antitrust and CFIUS clearance, are obtained. The deal, approved by Nathan’s board and supported by a voting agreement covering roughly 29.9% of the stock, consolidates Smithfield’s control over a brand it has licensed since 2014, is expected to be immediately accretive to Smithfield’s earnings and deliver cost synergies, tightens Nathan’s no-shop constraints while allowing for superior bids under fiduciary-out provisions, and includes retention bonuses for Nathan’s CEO and CFO as well as potential termination fees on both sides tied to competing offers and national security review outcomes, underscoring the transaction’s strategic and regulatory significance for shareholders and industry positioning in branded packaged meats.

The most recent analyst rating on (NATH) stock is a Hold with a $93.00 price target. To see the full list of analyst forecasts on Nathan’s Famous stock, see the NATH Stock Forecast page.