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RCI Hospitality Holdings (RICK)
NASDAQ:RICK
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RCI Hospitality Holdings
(NASDAQ:RICK)66Neutral
Positive Factors
Acquisitions
There is an increasing likelihood the company could announce one or more club acquisitions, which would be a positive contributor to revenue, adj. EBITDA and free cash flow.
Earnings
F1Q25 revenue exceeded estimates and, along with lower operating expenses, resulted in higher-than-expected adjusted EBITDA.
Negative Factors
Risks
Risks include dilution risk, high levels of industry competition, technology and execution risks, M&A and integration risk, adverse macroeconomic conditions, regulatory risks, and share volatility.
RCI Hospitality Holdings (RICK) vs. S&P 500 (SPY)
Market Cap
$417.19M
Dividend Yield0.55%
Average Volume (3M)65.82K
Price to Earnings (P/E)84.4
Beta (1Y)0.90
Revenue Growth-1.53%
EPS Growth-80.10%
CountryUS
Employees3,613
SectorConsumer Cyclical
Sector Strength53
IndustryRestaurants & Bars
Share Statistics
EPS (TTM)0.56
Shares Outstanding8,866,875
10 Day Avg. Volume54,551
30 Day Avg. Volume65,824
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.41
Price to Cash Flow (P/CF)7.80
P/FCF Ratio7.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$98.00Price Target Upside110.03% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
RCI Hospitality Holdings Business Overview & Revenue Model
Company DescriptionRCI Hospitality Holdings, Inc. (RICK) is a leading hospitality company primarily focused on the ownership and operation of nightclubs and restaurants. The company is renowned for its upscale adult entertainment venues and is one of the largest publicly traded operators in this sector in the United States. RCI Hospitality also operates a chain of sports bars and restaurants, providing a diverse range of nightlife and dining experiences.
How the Company Makes MoneyRCI Hospitality Holdings generates its revenue primarily through the operation of its strip clubs and nightclubs, which include cover charges, sale of alcoholic beverages, and service fees for private entertainment. Additionally, the company earns money from its restaurant segment, which includes sales of food and beverages. This diverse revenue model is complemented by strategic acquisitions and the development of new locations, enabling RCI to expand its market presence. Moreover, the company's focus on upscale venues allows it to maintain a strong brand reputation, attracting a loyal customer base willing to pay premium prices for entertainment and dining experiences.
RCI Hospitality Holdings Financial Statement Overview
Summary
RCI Hospitality Holdings displays solid financial health with strong cash flow management and efficiency in operations. However, challenges remain in revenue growth stability and enhancing shareholder returns. The company’s moderate leverage and balanced capital structure provide a stable foundation for future growth.Income Statement
RCI Hospitality Holdings demonstrates a strong gross profit margin of 70.66% in TTM (Trailing-Twelve-Months) and a fair net profit margin of 1.64%, indicating stability in its core operations despite a modest bottom line. However, the revenue growth rate over the years shows fluctuating trends, with a recent decline in TTM compared to the previous year, which poses a challenge for sustained growth. The EBIT and EBITDA margins are healthy, reflecting good operational efficiency.75
Positive
Balance Sheet
The company maintains a relatively balanced debt-to-equity ratio of 0.18 in TTM, suggesting reasonable use of leverage. The return on equity stands at 1.79%, which is relatively low, indicating challenges in generating high returns for shareholders. The equity ratio of 45.87% in TTM suggests a stable capital structure, though there is room for improvement in enhancing equity value.70
Positive
Cash Flow
RCI Hospitality Holdings shows a robust operating cash flow to net income ratio of 11.53 in TTM, highlighting strong cash generation capability relative to net income. The free cash flow growth is commendable, showing resilience in maintaining liquidity. The free cash flow to net income ratio of 8.60 further underscores the company’s efficiency in converting profits into free cash flow.80
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 293.18M | 295.60M | 293.79M | 267.62M | 195.26M | 132.33M | Gross Profit |
| 207.22M | 254.62M | 175.29M | 163.16M | 114.58M | 73.82M | EBIT |
| 27.74M | 18.80M | 51.48M | 71.46M | 38.55M | 2.75M | EBITDA |
| 44.30M | 34.68M | 67.02M | 84.59M | 60.15M | 22.13M | Net Income Common Stockholders |
| 4.81M | 3.01M | 29.25M | 46.04M | 30.34M | -6.31M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 19.97M | 32.35M | 21.02M | 35.98M | 35.69M | 15.61M | Total Assets |
| 609.89M | 584.36M | 610.88M | 530.74M | 364.62M | 360.93M | Total Debt |
| 268.62M | 52.92M | 277.90M | 241.26M | 151.10M | 168.50M | Net Debt |
| 248.64M | 20.57M | 256.88M | 205.28M | 115.41M | 152.90M | Total Liabilities |
| 324.39M | 321.25M | 329.56M | 288.98M | 185.40M | 208.63M | Stockholders Equity |
| 285.76M | 263.36M | 281.58M | 241.27M | 179.82M | 152.72M |
| Cash Flow | Free Cash Flow | ||||
| 35.62M | 55.88M | 18.75M | 40.51M | 28.48M | 9.90M | Operating Cash Flow |
| 55.46M | 55.88M | 59.13M | 64.51M | 41.99M | 15.63M | Investing Cash Flow |
| -20.34M | -21.02M | -64.82M | -67.80M | -6.81M | -994.00K | Financing Cash Flow |
| -21.56M | -23.54M | -9.26M | 3.58M | -15.10M | -13.13M |
RCI Hospitality Holdings Technical Analysis
Negative
46.66
Price Trends
53.60
Negative
51.22
Negative
47.84
Negative
Market Momentum
-1.77
Positive
28.85
Positive
7.70
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RICK, the sentiment is Negative. The current price of 46.66 is below the 20-day moving average (MA) of 50.73, below the 50-day MA of 53.60, and below the 200-day MA of 47.84, indicating a bearish trend. The MACD of -1.77 indicates Positive momentum. The RSI at 28.85 is Positive, neither overbought nor oversold. The STOCH value of 7.70 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RICK.
RCI Hospitality Holdings Risk Analysis
RCI Hospitality Holdings disclosed 38 risk factors in its most recent earnings report. RCI Hospitality Holdings 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
RCI Hospitality Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $2.49B | 15.06 | 41.18% | 2.20% | 4.13% | 56.76% | |
73 Outperform | $813.99M | 52.70 | 4.54% | ― | 1.81% | -15.53% | |
66 Neutral | $417.19M | 84.39 | 1.73% | 0.55% | -1.53% | -80.10% | |
61 Neutral | $754.27M | 9.53 | 38.89% | ― | 1.26% | -23.41% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
52 Neutral | $216.25M | 10.13 | -63.40% | ― | -2.50% | 15.46% | |
47 Neutral | $2.76B | ― | -19.46% | ― | 15.89% | 22.07% |
* Consumer Cyclical Sector Average
Performance Comparison
RICK
RCI Hospitality Holdings
46.66
-8.40
-15.26%
BJRI
BJ's Restaurants
35.93
-0.07
-0.19%
DENN
Denny's
4.16
-5.00
-54.59%
CAKE
Cheesecake Factory
49.16
13.76
38.87%
PLAY
Dave & Busters Entertainment
19.30
-41.85
-68.44%
SG
Sweetgreen
23.94
4.99
26.33%
RCI Hospitality Holdings Earnings Call Summary
Earnings Call Date: Feb 10, 2025 | % Change Since: -12.47% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture, with growth in the Nightclub segment and strategic acquisitions presenting a positive outlook. However, challenges such as a significant decline in the Bombshells segment sales and increased corporate expenses countered these gains.Highlights
Nightclub Segment Growth
Nightclubs revenues increased by $0.7 million or 1.1%, driven by a 3.7% increase in same-store sales and the addition of three new or reformatted clubs.
Bombshells Segment Profit Improvement
Despite a decline in total sales due to the closure of underperforming locations, the Bombshells segment saw improved GAAP and non-GAAP operating profit and margins.
Strategic Acquisitions
Acquired the Flight Club in Detroit for $8 million and real estate for $3 million, expected to generate $2 million annually in adjusted EBITDA.
Capital Allocation Strategy
Continued execution of a five-year capital allocation plan, including repurchasing 66,000 shares for $3.2 million and aiming to generate $250 million in free cash over the next five years.
Lowlights
Bombshells Segment Sales Decline
Bombshells revenues declined by $3.1 million or 24.7% due to the closure of five underperforming locations and a 7.5% decline in same-store sales.
Corporate Expense Increase
Corporate expenses increased by $1.7 million due to the establishment of an insurance reserve, impacting adjusted EBITDA.
Service Revenue Decline
Service revenue in the Nightclub segment declined by 3.7% year-over-year.
Company Guidance
During RCI Hospitality Holdings' first-quarter 2025 earnings call, key metrics and strategic guidance were discussed. In the Nightclub segment, both total sales and same-store sales showed an increase, with GAAP and non-GAAP operating profits remaining stable compared to the previous year. Bombshells segment experienced a decline in total sales due to the closure of underperforming locations, yet saw improvements in operating profit and margins. On a consolidated basis, net cash from operating activities and free cash flow nearly matched the year-ago levels. The company repurchased 66,000 shares for $3.2 million and acquired the Flight Club in Detroit for $11 million, estimating an annual adjusted EBITDA of $2 million. Additionally, RCI opened a new Bombshells location in Denver and promoted Rafael Pedraza to Director of Operations to enhance operational performance. The company aims for $400 million in revenues by fiscal 2029, with a target of $75 million in free cash flow and a reduction in share count to 7.5 million shares.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.