Rave Restaurant Group (RAVE) AI Stock Analysis

• Market Cap: $47.47M
• Dividend Yield: N/A
• Average Volume (3M): 48.85K
• Price to Earnings (P/E): 17.1
• Beta (1Y): 0.86
• Revenue Growth: 0.35%
• EPS Growth: 9.25%
• Country: US
• Employees: 21
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): N/A
• Shares Outstanding: 14,211,566
• 10 Day Avg. Volume: 51,548
• 30 Day Avg. Volume: 48,853
• PEG Ratio: 1.25
• Price to Book (P/B): 2.82
• Price to Sales (P/S): 3.31
• P/FCF Ratio: 11.94
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: 3.82
• Enterprise Value/Gross Profit: 5.34
• Enterprise Value/Ebitda: 11.33
• 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: 77 Outperform
• Price Target: $3.50 ▲(6.71% Upside)

The score is driven primarily by strong financial performance (high margins, low leverage, and robust free cash flow), supported by a moderately bullish technical trend (price above key moving averages with positive MACD). Valuation is reasonable at a mid-teens P/E, though the absence of dividend yield and the risk of uneven revenue growth/non-recurring profitability effects temper the overall rating.

Positive Factors

Strong Profit Margins

High and improving profit margins indicate effective cost management and pricing strategies, enhancing long-term profitability and competitiveness.

Debt Management

Significant reduction in debt enhances financial stability and flexibility, allowing for better resource allocation and investment in growth opportunities.

Cash Generation

Strong cash generation relative to net income supports ongoing operations and provides a buffer for future investments and potential downturns.

Negative Factors

Inconsistent Revenue Growth

Inconsistent revenue growth can hinder long-term strategic planning and investment, potentially affecting market position and competitive edge.

Negative Free Cash Flow Growth

Negative free cash flow growth may limit the company's ability to fund new projects or expansions, impacting long-term growth prospects.

Small Workforce

A small workforce may limit the company's ability to scale operations and manage growth effectively, potentially impacting long-term expansion plans.

Rave Restaurant Group Business Overview & Revenue Model

Company Description

Rave Restaurant Group, Inc., together with its subsidiaries, operates and franchises pizza buffet, delivery/carry-out (delco), and express restaurants under the Pizza Inn trademark in the United States and internationally. It operates through three segments: Pizza Inn Franchising, Pie Five Franchising, and Company-Owned Restaurants. The company's buffet restaurants are located in free standing buildings or strip centers in retail developments that offer dine-in, carryout, and catering services, as well as delivery services. Its delco restaurants provide delivery and carryout services and are located in shopping centers or other in-line retail developments. The company's Express restaurants serve customers through various non-traditional points of sale and are located in convenience stores, food courts, college campuses, airport terminals, travel plazas, athletic facilities, or other commercial facilities. In addition, it operates and franchises fast casual restaurants under the Pie Five Pizza Company or Pie Five trademarks. As of June 27, 2021, the company had 33 franchised Pie Five Units, 156 franchised Pizza Inn restaurants, and 11 licensed Pizza Inn Express, or PIE, kiosks. The company was formerly known as Pizza Inn Holdings, Inc. and changed its name to Rave Restaurant Group, Inc. in January 2015. Rave Restaurant Group, Inc. was founded in 1958 and is based in The Colony, Texas.

How the Company Makes Money

Rave Restaurant Group generates revenue through multiple streams, primarily from the sale of food and beverages in its restaurants. The company operates both company-owned and franchised locations, with franchise fees and royalties contributing significantly to its earnings. Additionally, RAVE engages in promotional partnerships and collaborations that enhance brand visibility and attract customers. The company also benefits from economies of scale in procurement and supply chain management, allowing it to maintain competitive pricing and improve margins. Overall, the combination of direct sales from its restaurants and fees from franchisees constitutes the core of RAVE's revenue model.

Rave Restaurant Group Financial Statement Overview

Summary

Strong overall fundamentals supported by high profitability (TTM gross margin ~71%, EBIT margin ~30%, EBITDA margin ~34%, net margin ~23%), very low leverage (debt-to-equity ~0.03), and solid cash generation (TTM free cash flow ~$3.4M with near 1.0x conversion vs net income). Key risks are inconsistent revenue growth and signs that 2022 profitability may have been boosted by non-recurring items, making trend quality less clean.

Income Statement

TTM (Trailing-Twelve-Months) results show solid profitability with high gross margin (~71%) and strong operating profitability (EBIT margin ~30%, EBITDA margin ~34%) alongside a healthy net margin (~23%). Earnings power has improved versus 2023–2024 as margins expanded and net income rose. The main drawback is choppy top-line performance: the latest annual period showed slightly negative revenue growth, and the extremely high 2022 net margin appears unusual versus surrounding years, suggesting results may be influenced by one-time items and are less “clean” to trend.

Balance Sheet

The balance sheet is conservatively positioned: leverage is very low in TTM (Trailing-Twelve-Months) with debt-to-equity around 0.03 and total debt under $0.5M, a major improvement from earlier years (notably 2021). Equity has grown over time, and returns on equity are strong (about 19–20% in the last two periods), indicating efficient use of capital. The primary risk is less about leverage and more about consistency—returns were unusually elevated in 2022, reinforcing that profitability may have had non-recurring support that year.

Cash Flow

Cash generation is strong and supports earnings quality: TTM (Trailing-Twelve-Months) operating cash flow is ~$3.5M and free cash flow is ~$3.4M, with free cash flow closely matching net income (near 1.0x). Cash flow relative to debt service looks comfortable (operating cash flow is over 2x interest expense in TTM). A watch-out is volatility in growth rates (including very large swings in free cash flow growth across years), which suggests cash flow can be uneven even though recent performance is robust.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	12.20M	12.04M	12.15M	11.89M	10.69M	8.59M
Gross Profit	8.72M	8.64M	8.49M	7.93M	7.41M	5.93M
EBITDA	4.11M	3.80M	3.57M	2.81M	3.03M	2.32M
Net Income	2.82M	2.70M	2.47M	1.61M	8.02M	1.52M
Balance Sheet
Total Assets	17.00M	16.56M	15.82M	14.24M	18.52M	13.35M
Cash, Cash Equivalents and Short-Term Investments	10.56M	9.88M	7.83M	5.33M	7.72M	8.33M
Total Debt	485.00K	576.00K	957.00K	1.42M	1.94M	4.20M
Total Liabilities	2.17M	2.40M	3.12M	3.85M	5.10M	7.61M
Stockholders Equity	14.84M	14.15M	12.70M	10.39M	13.41M	5.73M
Cash Flow
Free Cash Flow	3.40M	3.34M	2.66M	2.40M	1.22M	1.20M
Operating Cash Flow	3.48M	3.40M	2.74M	2.63M	1.38M	1.49M
Investing Cash Flow	-2.08M	-2.04M	-4.87M	-15.00K	338.00K	-238.00K
Financing Cash Flow	-1.39M	-1.39M	-311.00K	-5.01M	-2.33M	3.88M

Rave Restaurant Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.28
• 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 RAVE, the sentiment is Positive. The current price of 3.28 is above the 20-day moving average (MA) of 3.21, above the 50-day MA of 3.08, and above the 200-day MA of 2.90, indicating a bullish trend. The MACD of 0.07 indicates Negative momentum. The RSI at 60.37 is Neutral, neither overbought nor oversold. The STOCH value of 87.96 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RAVE.

Rave Restaurant Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RAVE	77 Outperform	$47.47M	17.07	20.05%	―	0.35%	9.25%
BDL	62 Neutral	$60.45M	12.01	7.97%	1.89%	8.99%	49.97%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
GTIM	46 Neutral	$12.25M	12.13	3.85%	―	1.84%	12.10%
NDLS	44 Neutral	$30.92M	-0.67	―	―	-0.35%	-37.02%
FAT	42 Neutral	$6.85M	-0.02	―	760.71%	-5.26%	-44.78%
ARKR	40 Underperform	$23.66M	-2.06	-29.84%	―	-9.70%	-194.23%