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Noodles & Co. (NDLS)
NASDAQ:NDLS

Noodles & Co (NDLS) AI Stock Analysis

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Noodles & Co

(NASDAQ:NDLS)

Rating:40Underperform
Price Target:
$0.50
▼(-29.58%Downside)
Noodles & Co faces significant financial instability with negative equity and persistent losses, reflected in a low overall stock score. Technical analysis reinforces a bearish outlook, and valuation metrics are unfavorable, with the stock trading at a depressed level. Despite some positive operational initiatives highlighted in the earnings call, the company's financial challenges and regulatory compliance issue weigh heavily on the stock's prospects.
Positive Factors
Customer Engagement
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.
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.

Noodles & Co (NDLS) vs. SPDR S&P 500 ETF (SPY)

Noodles & Co Business Overview & Revenue Model

Company DescriptionNoodles & Company (NDLS) is a fast-casual restaurant chain that specializes in offering a menu centered around noodle dishes and pasta. Founded in 1995 and headquartered in Broomfield, Colorado, the company operates in the restaurant and food service sector. Its core offerings include a diverse range of globally inspired noodle dishes, salads, and soups, appealing to a wide variety of palates and dietary preferences. With a focus on fresh ingredients and customizable options, Noodles & Company aims to provide customers with flavorful and convenient meal choices.
How the Company Makes MoneyNoodles & Company generates revenue primarily through the sale of food and beverages at its restaurant locations. The company's key revenue streams include in-restaurant dining, takeout, and delivery services. Additionally, Noodles & Company engages in catering services for both individual and corporate clients. The company also benefits from strategic partnerships with delivery platforms to enhance its accessibility and reach a broader customer base. Factors such as menu innovation, marketing initiatives, and customer loyalty programs contribute significantly to its earnings by driving traffic and encouraging repeat business.

Noodles & Co Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: -29.70%|
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 Financial Statement Overview

Summary
Noodles & Co is facing significant financial challenges, with negative profitability, declining revenues, and a leveraged balance sheet. Despite some ability to generate operating cash flow, the negative equity and consistent losses highlight substantial risks.
Income Statement
45
Neutral
The company's income statement shows weak profitability with negative net income and EBIT margins in the TTM (Trailing-Twelve-Months). Revenue has declined slightly compared to the previous year, indicating difficulty in maintaining top-line growth. The gross profit margin has dropped significantly, reflecting increased cost pressures or pricing challenges.
Balance Sheet
30
Negative
The balance sheet reveals a concerning financial position, with negative stockholders' equity indicating potential solvency issues. The debt-to-equity ratio is not calculable due to negative equity, and the company's high total debt suggests a leveraged position. These factors pose significant risks to financial stability.
Cash Flow
40
Negative
Cash flow analysis indicates struggles with cash generation, as free cash flow remains negative, though less negative compared to previous periods. The operating cash flow to net income ratio is positive, showing some ability to generate cash from core operations, but the overall cash flow situation remains weak.
BreakdownTTMDec 2024Mar 2024Mar 2023Dec 2021Dec 2020
Income Statement
Total Revenue495.67M493.27M503.40M509.48M475.15M393.65M
Gross Profit89.18M168.96M84.21M80.17M82.08M51.54M
EBITDA-1.28M1.29M21.76M22.44M28.15M1.68M
Net Income-39.13M-36.21M-9.86M-3.31M3.67M-23.26M
Balance Sheet
Total Assets298.94M324.65M368.10M343.84M341.46M353.63M
Cash, Cash Equivalents and Short-Term Investments1.40M1.15M3.01M1.52M2.25M7.84M
Total Debt181.54M291.50M300.41M264.16M249.78M280.42M
Total Liabilities333.36M330.23M340.94M305.48M303.83M323.93M
Stockholders Equity-34.41M-5.58M27.16M38.36M37.63M29.70M
Cash Flow
Free Cash Flow-18.45M-21.21M-24.55M-24.33M17.39M-2.66M
Operating Cash Flow4.59M7.56M27.50M9.56M36.16M9.12M
Investing Cash Flow-20.98M-26.71M-51.80M-32.31M-18.37M-10.95M
Financing Cash Flow16.46M17.29M25.80M22.02M-23.38M-798.00K

Noodles & Co Technical Analysis

Technical Analysis Sentiment
Negative
Last Price0.71
Price Trends
50DMA
0.84
Negative
100DMA
1.03
Negative
200DMA
1.01
Negative
Market Momentum
MACD
-0.04
Positive
RSI
41.78
Neutral
STOCH
60.24
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 0.71 is below the 20-day moving average (MA) of 0.77, below the 50-day MA of 0.84, and below the 200-day MA of 1.01, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 41.78 is Neutral, neither overbought nor oversold. The STOCH value of 60.24 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 (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$376.25M8.90117.47%-3.96%1036.87%
73
Outperform
$38.80M14.9621.75%2.93%20.81%
BDBDL
71
Outperform
$53.90M13.316.48%1.90%9.38%14.76%
64
Neutral
kr11.32B16.0810.84%13.08%2.66%5.01%
58
Neutral
$114.40M92.02%-1.68%-140.83%
FAFAT
45
Neutral
$43.05M38.50%433.33%10.63%-93.67%
40
Underperform
$32.63M-978.37%-0.61%-200.32%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NDLS
Noodles & Co
0.71
-0.85
-54.49%
BDL
Flanigan's Enterprises
29.00
3.17
12.27%
RAVE
Rave Restaurant Group
2.79
0.94
50.81%
RRGB
Red Robin Gourmet
6.89
0.29
4.39%
PBPB
Potbelly
12.51
5.08
68.37%
FAT
Fat Brands
2.46
-0.03
-1.20%

Noodles & Co Corporate Events

Delistings and Listing ChangesStock SplitRegulatory Filings and Compliance
Noodles & Co Faces Nasdaq Non-Compliance Notice
Negative
Jun 25, 2025

On June 24, 2025, Noodles & Company received a notification from Nasdaq indicating non-compliance with the Minimum Bid Price Requirement, as their stock price fell below $1.00 per share for 30 consecutive business days. The company has until December 22, 2025, to regain compliance by maintaining a minimum bid price of $1.00 per share for ten consecutive business days. If unsuccessful, they may qualify for an additional compliance period by transferring to The Nasdaq Capital Market. Noodles & Company is considering options, including a reverse stock split, to address the issue.

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.

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 01, 2025