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Noodles & Company (NDLS)
:NDLS
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Noodles & Co
(NASDAQ:NDLS)
41Neutral
Positive Factors
Brand Awareness
Steve Kennedy, recently hired as Noodles CMO, has expanded the platforms for customer messaging, contributing to a double-digit increase in brand awareness, brand search traffic, and app sessions.
Customer Response
The new menu launch has seen strong initial response from customers, with several dishes selling more strongly than what management had seen in test markets.
Loyalty Program
The Noodles Rewards loyalty program has seen significant increases in both loyalty sign-up rates and loyalty transactions since the new menu launch.
Negative Factors
Cost Pressures
Restaurant level margin was down driven largely by higher commodity costs and costs pressures related to the menu launch.
Restaurant Margin
Restaurant level margin of 11.2% was down 350bps y-o-y driven largely by a 230bps increase in cost of goods sold.
Noodles & Co (NDLS) vs. S&P 500 (SPY)
Market Cap
$39.24M
Dividend YieldN/A
Average Volume (3M)111.39K
Price to Earnings (P/E)―
Beta (1Y)1.25
Revenue Growth-0.61%
EPS Growth-200.32%
CountryUS
Employees7,300
SectorConsumer Cyclical
Sector Strength75
IndustryRestaurants
Share Statistics
EPS (TTM)-0.20
Shares Outstanding45,943,640
10 Day Avg. Volume166,141
30 Day Avg. Volume111,386
Financial Highlights & Ratios
PEG Ratio0.11
Price to Book (P/B)-6.92
Price to Sales (P/S)0.00
P/FCF Ratio-1.84
Enterprise Value/Market Cap8.39
Enterprise Value/Revenue0.17
Enterprise Value/Gross Profit5.86
Enterprise Value/Ebitda7.68
Forecast
1Y Price Target
$3.00Price Target Upside252.94% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Noodles & Co Business Overview & Revenue Model
Company DescriptionNoodles & Company, a restaurant concept company, develops and operates fast-casual restaurants. It offers cooked-to-order dishes, including noodles and pasta, soups, salads, and appetizers. As of December 28, 2021, the company operated 448 restaurants in 29 states, which included 372 company locations and 76 franchise locations. Noodles & Company was founded in 1995 and is based in Broomfield, Colorado.
How the Company Makes MoneyNoodles & Company generates revenue primarily through the sale of food and beverages at its restaurant locations. The company operates a combination of company-owned and franchised stores, with the majority of revenue coming from company-owned restaurants. Additionally, Noodles & Company benefits from digital sales through its online ordering platform and mobile app, which facilitate takeout and delivery options. The company also engages in strategic marketing partnerships and loyalty programs to increase customer engagement and drive repeat business. Other revenue streams include franchise fees and royalties from franchised locations.
Noodles & Co Financial Statement Overview
Summary
Noodles & Co faces significant financial challenges, including declining profitability, high leverage, and negative free cash flow. Operational inefficiencies and a high debt-to-equity ratio indicate financial instability.Income Statement
Noodles & Co has faced challenges with profitability as reflected in negative EBIT and net income figures in recent years. The gross profit margin shows a decline, and revenue growth is inconsistent, indicating potential operational inefficiencies.40
Negative
Balance Sheet
The company has a concerning negative stockholders' equity, indicating high leverage and financial instability. The debt-to-equity ratio is high, reflecting potential risk from heavy reliance on debt financing.30
Negative
Cash Flow
Operating cash flow remains positive, but free cash flow is negative, highlighting cash flow management issues. The operating cash flow to net income ratio indicates some ability to convert earnings into cash.45
Neutral
| Breakdown | ||||
| Dec 2024 | Mar 2024 | Mar 2023 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 493.27M | 503.40M | 509.48M | 475.15M | 393.65M | Gross Profit |
| 168.96M | 84.21M | 80.17M | 82.08M | 51.54M | EBIT |
| -27.78M | -5.03M | 5.33M | 11.54M | -13.49M | EBITDA |
| 1.29M | 21.76M | 22.44M | 28.15M | 1.68M | Net Income Common Stockholders |
| -36.21M | -9.86M | -3.31M | 3.67M | -23.26M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.15M | 3.01M | 1.52M | 2.25M | 7.84M | Total Assets |
| 324.65M | 368.10M | 343.84M | 341.46M | 353.63M | Total Debt |
| 291.50M | 300.41M | 264.16M | 249.78M | 280.42M | Net Debt |
| 290.35M | 297.40M | 262.64M | 247.52M | 272.58M | Total Liabilities |
| 330.23M | 340.94M | 305.48M | 303.83M | 323.93M | Stockholders Equity |
| -5.58M | 27.16M | 38.36M | 37.63M | 29.70M |
| Cash Flow | Free Cash Flow | |||
| -21.21M | -24.55M | -24.33M | 17.39M | -2.66M | Operating Cash Flow |
| 7.56M | 27.50M | 9.56M | 36.16M | 9.12M | Investing Cash Flow |
| -26.71M | -51.80M | -32.31M | -18.37M | -10.95M | Financing Cash Flow |
| 17.29M | 25.80M | 22.02M | -23.38M | -798.00K |
Noodles & Co Technical Analysis
Negative
0.85
Price Trends
1.01
Negative
1.10
Negative
1.13
Negative
Market Momentum
-0.05
Positive
39.46
Neutral
25.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NDLS, the sentiment is Negative. The current price of 0.85 is below the 20-day moving average (MA) of 0.93, below the 50-day MA of 1.01, and below the 200-day MA of 1.13, indicating a bearish trend. The MACD of -0.05 indicates Positive momentum. The RSI at 39.46 is Neutral, neither overbought nor oversold. The STOCH value of 25.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NDLS.
Noodles & Co Risk Analysis
Noodles & Co disclosed 37 risk factors in its most recent earnings report. Noodles & Co 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
Noodles & Co Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $39.37M | 14.85 | 21.75% | ― | 2.93% | 20.81% | |
73 Outperform | $307.15M | 7.24 | 117.47% | ― | -3.96% | 1036.87% | |
63 Neutral | $43.20M | 13.16 | 5.48% | 2.14% | 8.87% | -5.22% | |
61 Neutral | $6.97B | 11.38 | 2.88% | 3.90% | 2.64% | -22.07% | |
41 Neutral | $45.22M | ― | 38.50% | 21.96% | 10.63% | -93.67% | |
41 Neutral | $39.24M | ― | -978.37% | ― | -0.61% | -200.32% | |
38 Underperform | $54.27M | ― | 92.02% | ― | -4.19% | -266.52% |
* Consumer Cyclical Sector Average
Performance Comparison
NDLS
Noodles & Co
0.85
-1.20
-58.54%
BDL
Flanigan's Enterprises
23.24
-4.78
-17.06%
RAVE
Rave Restaurant Group
2.77
0.86
45.03%
RRGB
Red Robin Gourmet
3.08
-3.99
-56.44%
PBPB
Potbelly
10.18
1.50
17.28%
FAT
Fat Brands
2.52
-0.23
-8.36%
Noodles & Co Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: -15.84%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The call highlighted strong sales growth and successful brand and menu transformations, which are positive signs for the company's future. However, increased costs, lower margins, and rising net losses pose significant challenges. The sentiment is balanced by successful strategic initiatives and financial management improvements.Q1-2025 Updates
Positive Updates
Positive Same-Store Sales Growth
The company achieved a 4.7% increase in same-store sales for company-owned restaurants and a 4.4% increase system-wide. This growth continued in April with approximately 5% increase in same-store sales since the mid-March menu rollout.
Successful Menu Transformation
Noodles & Company introduced five new dishes and four reimagined recipes, resulting in nearly two-thirds of the menu being new or improved. The new mac and cheese dishes significantly exceeded expectations.
Increase in Brand Awareness and Loyalty
The new brand positioning and marketing strategies led to double-digit increases in brand awareness, brand search traffic, and app sessions. Loyalty signups and transactions also showed significant growth.
Improved Financial Foundation and Cost Management
The company reported significant progress in reducing capital expenditures and optimizing costs, with over $5 million in savings targeted for both 2024 and 2025.
Negative Updates
Increased Costs and Lower Margins
Costs in the first quarter rose to 26.6% of sales, driven by higher food costs. Restaurant-level contribution margin decreased to 10.3% from 13.1% in the first quarter of 2024.
Net Loss Increase
The net loss for the first quarter was $9.1 million, compared to a net loss of $6.1 million in the same period last year.
Decrease in Adjusted EBITDA
Adjusted EBITDA for the first quarter was $2.4 million, down from $5.5 million in the first quarter of 2024.
Restaurant Closures
The company closed three company-owned restaurants and one franchise restaurant in the first quarter, with more closures expected throughout the year.
Company Guidance
During Noodles & Company's Q1 2025 earnings call, the company provided optimistic guidance for the year, emphasizing their strategic priorities and financial performance. The company's total revenue increased by 2% to $123.8 million, while system-wide comp restaurant sales saw a 4.4% increase. Key metrics included a traffic increase of 1.8% and a check increase of 2.9%, driving a 4.7% same-store sales increase in company-owned restaurants. The company is projecting total 2025 revenue between $503 million and $512 million with mid-single-digit comp-restaurant sales growth. Restaurant contribution margin is expected to range between 12% and 14%, and capital expenditures are forecasted at $11 million to $13 million. Despite a Q1 net loss of $9.1 million, the company anticipates free cash flow positivity in the second half of the year, supported by strategic cost savings and a reduction in capital spending. This comes amid a comprehensive menu transformation and increased marketing efforts, which have bolstered brand awareness and sales momentum, setting a strong foundation for what the company views as a transformational 2025.Noodles & Co Corporate Events
Executive/Board ChangesShareholder Meetings
Noodles & Co Re-elects Directors at Annual Meeting
Neutral
May 15, 2025
Noodles & Co held its annual meeting of stockholders on May 14, 2025. Shareholders voted to re-elect three Class III directors, approve executive compensation, set the frequency of future advisory votes on executive compensation to one year, and ratify Ernst & Young LLP as the independent registered public accounting firm for 2025. A stockholder proposal for simple majority voting requirements was not approved.
The most recent analyst rating on (NDLS) stock is a Buy with a $4.00 price target. To see the full list of analyst forecasts on Noodles & Co stock, see the NDLS Stock Forecast page.
Spark’s Take on NDLS Stock
According to Spark, TipRanks’ AI Analyst, NDLS is a Neutral.
Noodles & Co’s stock is currently facing significant financial challenges with declining revenues and profitability. Despite strategic initiatives and leadership changes aimed at driving growth, the current financial instability and negative valuation metrics weigh heavily on the stock’s outlook. Technical indicators suggest potential for a rebound, but overall, the stock remains a high-risk investment given its current financial position.
To see Spark’s full report on NDLS stock, click here.
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.