Rave Restaurant Group (RAVE) AI Stock Analysis

• Market Cap: $37.38M
• Dividend Yield: N/A
• Average Volume (3M): 48.85K
• Price to Earnings (P/E): 18.6
• Beta (1Y): 0.93
• 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: 1.01
• Enterprise Value/Revenue: 3.06
• Enterprise Value/Gross Profit: 4.23
• Enterprise Value/Ebitda: 8.83
• 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

Sustained high margins indicate durable operating leverage and efficient unit economics across company and franchise operations. Elevated gross and EBIT margins provide pricing flexibility, a buffer against input cost shocks, and recurring operating cash to support reinvestment and franchise development over the medium term.

Conservative Balance Sheet

Very low leverage and strengthened equity materially reduce solvency risk and preserve financial optionality. A conservative balance sheet supports organic or franchised expansion, weathering local demand shocks, and funds strategic initiatives without reliance on costly external financing, improving long-term resilience.

Reliable Cash Generation

Free cash flow closely tracking net income signals earnings quality and consistent cash conversion from operations. That internal cash generation supports franchise support, unit-level investment, working capital needs and potential shareholder returns, reducing dependence on external capital over coming quarters.

Negative Factors

Inconsistent Revenue Growth

Stagnant top-line growth constrains scalability of the business and limits the ability to convert high margins into larger absolute profits. Reliance on same-store sales or irregular one-time items creates uncertainty in long-term revenue trajectory and raises execution demands on franchising expansion.

Weak FCF Momentum

A decline in FCF growth reduces flexibility for reinvestment and franchise support during market stress. Even with positive absolute FCF, shrinking momentum can force tougher prioritization between capex, marketing, and franchise development, and may expose sensitivity of cash conversion to operational swings.

Small Scale and Concentration

Limited revenue scale and a compact corporate footprint constrain bargaining power with suppliers, brand marketing reach, and the pace of franchise development. Concentration in pizza-focused concepts increases exposure to competitive and local demand shifts, making growth and diversification more challenging.

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 makes money through a mix of (1) sales from company-owned restaurants and (2) franchising-related income. For company-owned locations, revenue is generated primarily from direct customer purchases of food and beverages (dine-in, carryout, and, where offered, delivery), with the company recognizing restaurant-level sales and managing the associated operating costs (food, labor, occupancy, and marketing). For franchised locations, the company earns revenue from franchise fees and ongoing royalties that are typically based on a percentage of franchisee restaurant sales; it may also earn other franchise-related fees tied to development agreements, transfers, renewals, training, and/or required marketing contributions, to the extent such arrangements exist and are in force. The overall earnings profile is influenced by systemwide restaurant sales performance, the number of operating units (company-owned and franchised), franchisee openings/closures, brand demand, and restaurant-level unit economics.

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: Neutral

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 2.84, above the 50-day MA of 3.08, and above the 200-day MA of 2.97, indicating a bearish trend. The MACD of -0.14 indicates Positive momentum. The RSI at 36.25 is Neutral, neither overbought nor oversold. The STOCH value of 40.05 is Neutral, 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	$37.38M	18.57	19.70%	―	0.35%	9.25%
BDL	65 Neutral	$64.31M	17.07	8.92%	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	17.64	3.18%	―	1.84%	12.10%
ARKR	46 Neutral	$24.52M	6.41	-29.84%	―	-9.70%	-194.23%
NDLS	43 Neutral	$36.69M	-0.81	203.92%	―	-0.35%	-37.02%