Nathan's Famous (NATH) AI Stock Analysis

• Market Cap: $414.03M
• Dividend Yield: 2.09%
• Average Volume (3M): 44.98K
• Price to Earnings (P/E): 18.2
• Beta (1Y): 0.59
• Revenue Growth: 7.81%
• EPS Growth: 4.58%
• Country: US
• Employees: 147
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): N/A
• 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: 1.05
• Enterprise Value/Revenue: 2.90
• Enterprise Value/Gross Profit: 8.66
• Enterprise Value/Ebitda: 11.75
• 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: 71 Outperform
• Price Target: $111.00 ▲(21.01% Upside)

The score is driven primarily by solid profitability and cash flow, offset by significant balance sheet risk from negative equity. Technicals are supportive with the stock above key moving averages, and valuation is reasonable with a modest dividend. The pending all-cash acquisition provides a notable positive event, though regulatory approval risk remains.

Positive Factors

Franchise & Brand Model

A diversified revenue mix—franchise royalties, company restaurants and retail packaged products—leverages a century-old brand and scalable royalty streams. The franchise model reduces capital intensity and supports steady recurring margins and geographic expansion over time.

Cash Generation

Material free cash flow growth indicates strong operating conversion and efficient capex management. Reliable FCF provides the company flexibility to fund franchise support, retail distribution, shareholder returns, and debt reduction, improving long-term financial optionality.

Margin Sustainability

Consistently high gross margins and improved net margins reflect durable unit economics and effective cost control in restaurants and retail. Sustained margins support reinvestment, dividends and resilience through input-cost cycles, underpinning medium-term cash generation.

Negative Factors

Negative Equity / Leverage

Negative equity and high leverage raise structural financial risk, constraining borrowing capacity and increasing vulnerability to cash-flow shocks. Persistent negative equity can limit strategic flexibility, elevate refinancing risk and complicate long-term capital allocation decisions.

Regulatory Transaction Risk

The agreed all-cash acquisition depends on antitrust and CFIUS approvals and shareholder votes. Regulatory review could delay or block the transaction, altering strategic outcomes, synergies timing and management incentives, and creating months-long uncertainty for operations and planning.

Slowing Revenue Growth

While recent revenue rose, the firm notes decelerating growth rates. Slower top-line expansion may signal market saturation in core channels or limits to retail scaling, requiring investment or new initiatives to sustain long-term revenue momentum and margin leverage.

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 support the score (stable ~39.5% gross margin, improved ~16.2% net margin, and ~27.0% free cash flow growth from 2024 to 2025). However, the balance sheet is a major risk due to negative equity and high leverage despite some liability reduction.

Income Statement

Nathan's Famous has exhibited a robust revenue growth trend with a notable increase of 6.91% from 2024 to 2025 and 6.00% from 2023 to 2024. The gross profit margin has been stable at around 39.5%, and the net profit margin improved to 16.21% in 2025, which indicates strong profitability. The EBIT and EBITDA margins are also healthy, showing effective cost management. However, the growth rate in revenue is slowing, which could be a concern for future growth prospects.

Balance Sheet

The company exhibits a high debt-to-equity ratio due to negative stockholders' equity, which raises concerns about financial stability and leverage. The equity ratio is negative, indicating that liabilities exceed assets. Despite this, the company has managed to reduce its total liabilities over the years, suggesting some improvement in financial management, but the high leverage remains a significant risk.

Cash Flow

Operating cash flow has grown consistently, with a significant free cash flow growth of 27.04% from 2024 to 2025. The operating cash flow to net income ratio is favorable, indicating strong cash generation relative to accounting profits. The free cash flow to net income ratio is also robust, reflecting efficient capital expenditure management. However, the reliance on cash reserves and ongoing negative financing cash flows highlight potential liquidity risks.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	150.41M	148.18M	138.61M	130.78M	114.88M	75.84M
Gross Profit	50.33M	51.98M	49.25M	49.64M	44.06M	38.74M
EBITDA	37.10M	37.82M	33.94M	35.68M	29.73M	27.11M
Net Income	23.68M	24.03M	19.62M	19.62M	13.60M	11.07M
Balance Sheet
Total Assets	63.44M	53.48M	48.86M	58.61M	78.52M	108.81M
Cash, Cash Equivalents and Short-Term Investments	26.87M	27.80M	21.03M	29.86M	50.06M	81.06M
Total Debt	54.89M	55.92M	66.39M	86.24M	116.52M	156.22M
Total Liabilities	72.78M	69.99M	81.78M	103.17M	133.50M	171.29M
Stockholders Equity	-9.34M	-16.51M	-32.92M	-44.56M	-54.99M	-62.48M
Cash Flow
Free Cash Flow	19.73M	25.02M	19.69M	19.21M	15.84M	11.21M
Operating Cash Flow	20.03M	25.24M	20.00M	19.84M	16.48M	11.77M
Investing Cash Flow	-299.00K	-225.00K	-313.00K	-584.00K	-636.00K	-551.00K
Financing Cash Flow	-18.84M	-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: Negative
• RSI: Neutral
• STOCH: Negative

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 95.77, below the 50-day MA of 94.30, and below the 200-day MA of 99.47, indicating a bullish trend. The MACD of 2.03 indicates Negative momentum. The RSI at 66.69 is Neutral, neither overbought nor oversold. The STOCH value of 91.79 is Negative, 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	71 Outperform	$414.03M	18.20	―	2.09%	7.81%	4.58%
LOCO	68 Neutral	$303.44M	11.49	9.63%	―	2.09%	12.10%
PTLO	68 Neutral	$425.87M	15.62	5.82%	―	2.40%	-14.90%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
DIN	58 Neutral	$496.03M	15.38	―	5.10%	6.47%	-62.84%
JACK	49 Neutral	$400.59M	-4.92	―	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.