Rave Restaurant Group (RAVE) AI Stock Analysis

• Market Cap: $40.50M
• Dividend Yield: N/A
• Average Volume (3M): 48.85K
• Price to Earnings (P/E): 14.3
• Beta (1Y): 0.88
• Revenue Growth: 0.35%
• EPS Growth: 9.25%
• Country: US
• Employees: 21
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 0.04
• 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: 3.21
• Enterprise Value/Gross Profit: 4.44
• Enterprise Value/Ebitda: 9.26
• 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: 78 Outperform
• Price Target: $3.00 ▼(-8.54% Downside)
• Action: Reiterated Date: 02/07/26
• Date: Action: Reiterated 02/07/26

The score is driven primarily by strong financial performance—high and improving margins and a low-debt balance sheet—partly offset by inconsistent revenue/FCF momentum. Technicals are mildly supportive with price above key moving averages but only neutral momentum indicators, while valuation is reasonable on P/E but lacks dividend support.

Positive Factors

High profitability margins

Sustained high gross and operating margins imply durable unit economics and pricing power in the pizza segment. These margins provide structural earnings resilience against input-cost swings, enable reinvestment in brand and franchising, and support long-term cash generation.

Very low leverage / strong balance sheet

Extremely low debt and a strengthened equity base materially lower financial risk and preserve strategic flexibility. With minimal interest burden the company can fund capex or franchise support from internal resources, better withstand downturns, and pursue opportunistic growth.

Consistent cash generation quality

Operating cash flow and FCF closely track reported earnings, indicating high earnings quality and reliable cash conversion. This steady cash generation underpins franchise support, routine reinvestment, and reduces reliance on external financing for near-term growth initiatives.

Negative Factors

Inconsistent revenue growth

Top-line volatility and periods of flat annual revenue weaken visibility into sustainable growth drivers. Inconsistent revenue complicates franchise development pacing, makes long-term planning harder, and reduces confidence in the company's ability to scale earnings predictably.

Declining free cash flow momentum

A marked decline in TTM FCF growth after prior gains suggests variability in cash conversion or higher discretionary spending. If this persists it could limit organic expansion, delay reinvestment, or force external financing for new openings, increasing execution risk.

Relatively small revenue base

A modest revenue scale constrains bargaining power, operational leverage, and franchise appeal versus larger peers. Smaller system size makes results more sensitive to individual unit performance and slows the pace at which fixed-cost dilution and national brand momentum can be achieved.

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 profitability (TTM gross margin ~71%, net margin ~23%, EBIT margin ~30%) and a very conservative balance sheet (debt-to-equity ~0.03). Cash flow supports earnings (FCF ~0.98x net income), but uneven revenue growth and a recent decline in TTM free cash flow growth reduce visibility.

Income Statement

TTM (Trailing-Twelve-Months) revenue is $12.38M with very strong profitability (gross margin ~71%, net margin ~23%, and EBIT margin ~30%). Profitability has expanded versus prior years (net margin ~13.6% in 2023 to ~22–23% in 2025/TTM), indicating improved operating leverage. The main weakness is growth consistency: annual revenue growth was roughly flat in 2025 (about -0.9%), and the TTM growth rate shown is unusually high, suggesting potential volatility or non-recurring effects in the growth calculation.

Balance Sheet

The balance sheet is conservatively positioned with very low leverage in the most recent periods (TTM total debt ~$0.39M vs. equity ~$15.54M; debt-to-equity ~0.03). Equity has steadily strengthened since 2023, while total debt has trended down meaningfully from 2021–2024 levels. Returns on equity remain healthy (~19–20% in 2024–TTM), though 2022 shows an unusually high net income/ROE reading that appears non-recurring, which is a watch item for normalized earnings power.

Cash Flow

Cash generation is solid: TTM operating cash flow is ~$3.09M and free cash flow is ~$3.05M, with free cash flow closely tracking net income (TTM ~0.98x), suggesting earnings quality is generally good. Coverage of net income by operating cash flow is strong in 2024–TTM (about 1.36x to 2.16x). The key weakness is momentum—TTM free cash flow growth is sharply negative (about -10.4%) after positive growth in prior years, pointing to near-term variability in cash conversion or spending.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	12.38M	12.04M	12.15M	11.89M	10.69M	8.59M
Gross Profit	8.95M	8.64M	8.49M	7.93M	7.41M	5.93M
EBITDA	4.29M	3.80M	3.57M	2.81M	3.03M	2.32M
Net Income	2.85M	2.70M	2.47M	1.61M	8.02M	1.52M
Balance Sheet
Total Assets	17.55M	16.56M	15.82M	14.24M	18.52M	13.35M
Cash, Cash Equivalents and Short-Term Investments	10.90M	9.88M	7.83M	5.33M	7.72M	8.33M
Total Debt	408.00K	576.00K	957.00K	1.42M	1.94M	4.20M
Total Liabilities	2.01M	2.40M	3.12M	3.85M	5.10M	7.61M
Stockholders Equity	15.54M	14.15M	12.70M	10.39M	13.41M	5.73M
Cash Flow
Free Cash Flow	3.05M	3.34M	2.66M	2.40M	1.22M	1.20M
Operating Cash Flow	3.09M	3.40M	2.74M	2.63M	1.38M	1.49M
Investing Cash Flow	-4.14M	-2.04M	-4.87M	-15.00K	338.00K	-238.00K
Financing Cash Flow	-1.20M	-1.39M	-311.00K	-5.01M	-2.33M	3.88M

Rave Restaurant Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.28
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RAVE, the sentiment is Negative. The current price of 3.28 is above the 20-day moving average (MA) of 3.14, above the 50-day MA of 3.17, and above the 200-day MA of 2.97, indicating a bearish trend. The MACD of -0.09 indicates Positive momentum. The RSI at 34.08 is Neutral, neither overbought nor oversold. The STOCH value of 15.18 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RAVE.

Rave Restaurant Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RAVE	78 Outperform	$40.50M	14.31	20.05%	―	0.35%	9.25%
BDL	65 Neutral	$59.50M	10.29	7.97%	1.89%	8.99%	49.97%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
GTIM	48 Neutral	$12.46M	12.10	3.85%	―	1.84%	12.10%
ARKR	46 Neutral	$24.41M	-1.78	-29.84%	―	-9.70%	-194.23%
NDLS	43 Neutral	$36.75M	-0.80	―	―	-0.35%	-37.02%