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RCI Hospitality Holdings (RICK)
NASDAQ:RICK
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RCI Hospitality Holdings
(NASDAQ:RICK)
Rating:61Neutral
Price Target:
$43.00
▲(8.20%Upside)
Positive Factors
Operational Improvements
Trends in March were more favorable, indicating that softer sales trends were only temporary and weather-related rather than a sign of broader business issues.
Revenue Growth
The company's acquisition of a club in West Columbia, South Carolina, aligns with its five-year back to basics plan, suggesting potential for revenue growth.
Share Repurchase
The company is expected to become more aggressive with share repurchases, which is a long-term positive for shareholders.
Negative Factors
Competitive and External 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.
Industry Competition
High levels of industry competition pose a significant risk to the company's market positioning and profitability.
RCI Hospitality Holdings (RICK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$360.99M
Dividend Yield0.68%
Average Volume (3M)41.22K
Price to Earnings (P/E)48.9
Beta (1Y)0.83
Revenue Growth-3.93%
EPS Growth-59.06%
CountryUS
Employees3,613
SectorConsumer Cyclical
Sector Strength61
IndustryRestaurants
Share Statistics
EPS (TTM)0.36
Shares Outstanding8,798,250
10 Day Avg. Volume55,901
30 Day Avg. Volume41,216
Financial Highlights & Ratios
PEG Ratio0.96
Price to Book (P/B)1.30
Price to Sales (P/S)0.00
P/FCF Ratio7.41
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue0.31
Enterprise Value/Gross Profit1.60
Enterprise Value/Ebitda2.10
Forecast
1Y Price Target
$98.00Price Target Upside146.60% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
RCI Hospitality Holdings Business Overview & Revenue Model
Company DescriptionRCI Hospitality Holdings, Inc. (RICK) is a leading hospitality company primarily operating in the adult entertainment and restaurant sectors. The company is known for owning and operating upscale adult nightclubs and a series of themed restaurants. These establishments are located throughout the United States, providing entertainment, dining, and beverage services to a diverse clientele. RCI Hospitality Holdings is recognized for its focus on high-quality service and unique customer experiences.
How the Company Makes MoneyRCI Hospitality Holdings generates revenue through various streams primarily associated with its adult nightclubs and restaurant operations. The adult nightclubs, which are the company's core business, contribute significantly to its earnings through cover charges, beverage sales, and VIP services. Additionally, these clubs offer private entertainment services, which further enhance revenue. The restaurant segment, which includes themed dining establishments, generates income through food and beverage sales. RCI leverages its brand reputation and strategic locations to attract a broad customer base, enhancing its profitability. Furthermore, strategic partnerships and marketing initiatives play a crucial role in driving customer engagement and boosting sales across its venues.
RCI Hospitality Holdings Earnings Call Summary
Earnings Call Date:May 12, 2025
(Q2-2025)
| % Change Since: -8.24%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive and negative elements. While there were successful acquisitions and improvements in net income and impairments, the company faced significant revenue declines, particularly in the Bombshells segment, due to divestitures and adverse weather conditions affecting same-store sales.Q2-2025 Updates
Positive Updates
Acquisition and Rebranding Success
RCI Hospitality acquired two upscale adult nightclubs: Flight Club in Detroit and Platinum West in South Carolina, aligning with their capital allocation strategy. Additionally, they opened a Bombshells in Denver and rebranded Chicas Locas in El Paso.
Improvement in Net Income
Net income attributable to common shareholders was $3.2 million, an increase of $2.5 million year-over-year, with GAAP EPS rising to $0.36 per share from $0.08 per share.
Decrease in Impairments
Impairments and other charges were reduced to $2.1 million, down from $8.2 million, reflecting improved management in the nightclub segment.
Capital Allocation Strategy
RCI repurchased 56,875 common shares for $2.9 million and aims to allocate 40% of free cash flow to club acquisitions and 60% to share buybacks, debt reduction, and dividends to grow free cash flow per share by 10% to 15% annually.
Negative Updates
Revenue Decline
Total revenues were $65.9 million, down $6.4 million from the previous year due to closures, divestitures of nonperforming Bombshells, and severe weather impacts.
Bombshells Segment Loss
Bombshells revenue fell 35.6% year-over-year to $8.2 million, with a segment operating loss of $227,000 versus an income of $699,000 previously.
Challenges in Same-Store Sales
Nightclub same-store sales declined by 3.5% and Bombshells same-store sales by 13.4%, impacting overall performance.
Weather-Related Impacts
Severe weather led to temporary closures and reduced business at 18 locations, contributing to lower sales and increased operational challenges.
Company Guidance
In the second quarter of 2025, RCI Hospitality Holdings reported total revenues of $65.9 million, a year-over-year decrease of $6.4 million, primarily due to closures or divestitures of underperforming Bombshells locations and adverse weather conditions affecting sales. Despite these challenges, the company saw improving trends in March and contributions from new and rebranded locations, including the acquisition of upscale nightclubs Flight Club in Detroit and Platinum West in South Carolina. Net income attributable to RCIHH common shareholders increased to $3.2 million from $0.8 million, with GAAP EPS rising to $0.36 from $0.08. The company ended the quarter with approximately 8.8 million shares outstanding after repurchasing 56,875 common shares for $2.9 million. RCI aims to grow free cash flow per share by 10% to 15% annually through strategic capital allocation, focusing on club acquisitions and share buybacks, with a five-year target to generate over $250 million in free cash flow and repurchase a significant amount of shares.RCI Hospitality Holdings Financial Statement Overview
Summary
RCI Hospitality Holdings shows strong operational efficiency with a commendable Gross Profit Margin of 79.24% and robust cash flow management. However, profitability margins indicate room for growth, and revenue has been flat.Income Statement
RCI Hospitality Holdings shows a commendable Gross Profit Margin at 79.24% for TTM, indicating efficient cost management. The Net Profit Margin of 2.53% reflects a modest profitability. Revenue growth appears flat, with a slight decrease in TTM revenue compared to the previous annual figure. Margins like EBIT and EBITDA at 8.04% and 11.02% respectively suggest strong operational performance, though there's room for improvement in managing expenses.72
Positive
Balance Sheet
The company maintains a stable financial position with a Debt-to-Equity Ratio of 0.18, showing prudent leveraging. The Return on Equity (ROE) stands at 2.70% for TTM, which is relatively low, suggesting less efficiency in generating profits from shareholders' equity. The Equity Ratio of 45.56% indicates a healthy balance sheet with a good proportion of equity financing.68
Positive
Cash Flow
RCI Hospitality Holdings demonstrates robust cash flow management with a positive Free Cash Flow growth of 49.95% from the previous year to TTM. The Operating Cash Flow to Net Income Ratio of 7.34 suggests strong cash conversion efficiency. The Free Cash Flow to Net Income Ratio of 6.45 indicates effective utilization of cash.75
Positive
| Breakdown | TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 286.77M | 295.60M | 293.79M | 267.62M | 195.26M | 132.33M |
| Gross Profit | 227.18M | 254.62M | 175.29M | 163.16M | 114.58M | 73.82M |
| EBITDA | 31.59M | 34.68M | 67.02M | 84.59M | 60.15M | 22.13M |
| Net Income | 7.27M | 3.01M | 29.25M | 46.04M | 30.34M | -6.31M |
Balance Sheet | ||||||
| Total Assets | 589.76M | 584.36M | 610.88M | 530.74M | 364.62M | 360.93M |
| Cash, Cash Equivalents and Short-Term Investments | 32.66M | 32.35M | 21.02M | 35.98M | 35.69M | 15.61M |
| Total Debt | 49.49M | 272.25M | 277.90M | 241.26M | 151.10M | 168.50M |
| Total Liabilities | 321.22M | 321.25M | 329.56M | 288.98M | 185.40M | 208.63M |
| Stockholders Equity | 268.79M | 263.36M | 281.58M | 241.27M | 179.82M | 152.72M |
Cash Flow | ||||||
| Free Cash Flow | 46.89M | 31.28M | 18.75M | 40.51M | 28.48M | 9.90M |
| Operating Cash Flow | 53.31M | 55.88M | 59.13M | 64.51M | 41.99M | 15.63M |
| Investing Cash Flow | -20.55M | -21.02M | -64.82M | -67.80M | -6.81M | -994.00K |
| Financing Cash Flow | -20.06M | -23.54M | -9.26M | 3.58M | -15.10M | -13.13M |
RCI Hospitality Holdings Technical Analysis
Neutral
39.74
Price Trends
40.70
Positive
43.02
Negative
46.37
Negative
Market Momentum
-0.33
Negative
55.09
Neutral
82.65
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RICK, the sentiment is Neutral. The current price of 39.74 is below the 20-day moving average (MA) of 40.20, below the 50-day MA of 40.70, and below the 200-day MA of 46.37, indicating a neutral trend. The MACD of -0.33 indicates Negative momentum. The RSI at 55.09 is Neutral, neither overbought nor oversold. The STOCH value of 82.65 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | C$5.24B | 11.08 | 18.82% | 3.79% | 5.08% | 6.52% | |
61 Neutral | $360.99M | 48.89 | 2.62% | 0.68% | -3.93% | -59.06% | |
59 Neutral | $127.59M | 36.29 | -1.62% | 0.77% | 14.40% | -114.79% | |
59 Neutral | $158.53M | ― | -9.31% | ― | 138.50% | -60576.19% | |
58 Neutral | $53.90M | 13.31 | 6.48% | 1.90% | 9.38% | 14.76% | |
58 Neutral | $53.90M | 13.31 | 6.48% | 1.90% | 9.38% | 14.76% | |
57 Neutral | $484.75M | ― | -48.00% | ― | ― | ― | |
44 Neutral | $99.08M | ― | ― | -14.11% | 54.77% | ||
44 Neutral | $99.08M | ― | ― | -14.11% | 54.77% |
* Consumer Cyclical Sector Average
Performance Comparison
RICK
RCI Hospitality Holdings
41.03
2.04
5.23%
BDL
Flanigan's Enterprises
29.21
2.95
11.23%
BDL
Flanigan's Enterprises
29.21
2.95
11.23%
STKS
The ONE Group Hospitality
5.13
1.07
26.35%
THCH
TH International
2.98
-0.16
-5.10%
THCH
TH International
2.98
-0.16
-5.10%
GENK
GEN Restaurant Group, Inc. Class A
3.83
-4.54
-54.24%
VENU
Venu Holding Corporation
12.79
1.99
18.43%
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.