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RCI Hospitality (RICK)
:RICK
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RCI Hospitality Holdings
(NASDAQ:RICK)
Rating:64Neutral
Price Target:
$39.00
▲(7.53% Upside)
Positive Factors
Acquisition Strategy
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.
Financial Performance
F1Q25 revenue exceeded estimates and, along with lower operating expenses, resulted in higher-than-expected adjusted EBITDA.
Share Repurchases
The company is expected to become more aggressive with share repurchases, which is a long-term positive for shareholders.
Negative Factors
Asset Divestiture
The divestiture of underperforming restaurant assets is expected to drive margin improvement over time.
Weather Impact
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.
RCI Hospitality Holdings (RICK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$317.08M
Dividend Yield0.77%
Average Volume (3M)81.69K
Price to Earnings (P/E)19.5
Beta (1Y)0.92
Revenue Growth-5.34%
EPS Growth256.61%
CountryUS
Employees3,613
SectorConsumer Cyclical
Sector Strength70
IndustryRestaurants
Share Statistics
EPS (TTM)0.46
Shares Outstanding8,720,461
10 Day Avg. Volume93,575
30 Day Avg. Volume81,691
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.82
Enterprise Value/Revenue2.05
Enterprise Value/Gross Profit2.59
Enterprise Value/Ebitda11.37
Forecast
1Y Price Target
$41.00Price Target Upside13.04% Upside
Rating ConsensusHold
Number of Analyst Covering0
RCI Hospitality Holdings Business Overview & Revenue Model
Company DescriptionRCI Hospitality Holdings, Inc. (RICK) is a diversified company primarily operating in the hospitality and entertainment sectors. The company owns and operates a chain of adult-themed nightclubs and restaurants, primarily under the brand names 'Rick's Cabaret,' 'Club Onyx,' and 'XTC Cabaret.' RCI also engages in the acquisition and development of hospitality-related properties, expanding its footprint in the adult entertainment industry and providing a unique blend of dining and entertainment experiences for its customers.
How the Company Makes MoneyRCI Hospitality Holdings generates revenue primarily through the operation of its nightclubs and restaurants, which include admissions, food and beverage sales, and private events. The company also earns income from the sale of merchandise and through partnerships with various entertainment and hospitality vendors. Significant revenue streams include cover charges at their venues, drink sales, and special event hosting, which contribute to a robust earnings model. Additionally, RCI's investment in the acquisition of new locations and properties enhances its market presence and revenue potential, positioning the company for growth in the competitive adult entertainment sector.
RCI Hospitality Holdings Earnings Call Summary
Earnings Call Date:Aug 11, 2025
(Q3-2025)
| % Change Since: 0.06%|
Next Earnings Date:Dec 10, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with positive developments in profitability and strategic acquisitions, but challenges persisted in revenue generation and operational segments like Bombshells. The company's efforts to manage costs and expand its nightclub operations are promising, but declines in revenue and non-GAAP EPS, along with high insurance reserves, weigh on the outlook.Q3-2025 Updates
Positive Updates
Nightclub Revenue Stability
Nightclub revenues were nearly level despite economic uncertainty, with a small decline of less than 1% year-over-year due to a 3.7% decline in same-store sales and the absence of Baby Dolls Fort Worth.
Profitability and Acquisition Strategy
Consolidated profitability benefited from the absence of impairment charges, and the company acquired 2 upscale nightclubs with price multiples in line with their capital allocation strategy.
Successful New Openings and Expansions
Rick's Cabaret and Steakhouse opened in Central City, Colorado, and a new Bombshells location in Lubbock, Texas, has been performing very well since opening.
Increase in Operating Income and Margins
Operating income was $17.8 million compared to $13.6 million, with margins increasing to 28.5% from 21.7% year-over-year.
Decrease in Impairment Charges
Impairments and other charges were $2.3 million compared to $18.3 million, showing a significant decrease.
Negative Updates
Decrease in Total Revenues
Total revenues were $71.1 million compared to $76.2 million, a decline of $5 million primarily due to the sale and divestiture of underperforming Bombshells locations.
Decline in Adjusted EBITDA and Non-GAAP EPS
Adjusted EBITDA decreased to $15.3 million from $20.1 million, and non-GAAP EPS was $0.77 compared to $1.35 year-over-year.
Challenges in Bombshells Segment
Bombshells segment saw a 13.5% decline in same-store sales and a minimal operating income of $87,000 compared to a loss of $8.9 million previously.
Continued High Insurance Reserves
The company is experiencing high noncash expenses related to self-insurance, with year-to-date reserves at $9.4 million.
Lower Service Revenues
Service revenues increased by only 0.3%, while alcoholic beverages declined by 3.9%.
Company Guidance
During RCI Hospitality Holdings' third-quarter 2025 earnings call, the company provided a comprehensive overview of their financial performance and strategic initiatives. Key metrics highlighted include total revenues of $71.1 million, a decrease from $76.2 million year-over-year, primarily due to the divestiture of underperforming Bombshells locations. Nightclub revenues totaled $62.3 million, reflecting a slight decline due to a 3.7% drop in same-store sales and the impact of a fire at Baby Dolls Fort Worth. The company's net income attributable to common shareholders was $4.1 million, contrasting with a loss of $5.2 million in the previous year, resulting in a GAAP EPS of $0.46 per share. Free cash flow was stable at $13.3 million, while adjusted EBITDA was $15.3 million, down from $20.1 million. The call also discussed RCI's capital allocation strategy, emphasizing a 40% allocation of free cash to club acquisitions and 60% to share buybacks, debt reduction, and dividends. Additionally, the company reported purchasing over 75,000 shares of common stock for $3 million and ending the quarter with approximately 8.76 million shares outstanding. RCI's strategic focus remains on optimizing nightclub operations, managing its real estate assets, and expanding through acquisitions and new openings, including a successful new Bombshells location in Lubbock, Texas.RCI Hospitality Holdings Financial Statement Overview
Summary
RCI Hospitality Holdings shows strong operational efficiency and cash flow management, with significant improvements in leverage. However, challenges in revenue growth and net profitability remain areas for improvement.Income Statement
RCI Hospitality Holdings shows a strong gross profit margin of 86.8% in TTM, indicating efficient cost management. However, the net profit margin is relatively low at 5.9%, reflecting challenges in converting revenue into profit. Revenue growth has been negative recently, suggesting potential market or operational challenges. The EBIT and EBITDA margins are healthy, indicating good operational efficiency.70
Positive
Balance Sheet
The company has significantly improved its debt-to-equity ratio to 0.19 in TTM, showcasing reduced leverage and financial risk. However, the return on equity is modest at 6.2%, indicating limited profitability from shareholder investments. The equity ratio of 45.1% suggests a balanced capital structure.65
Positive
Cash Flow
RCI Hospitality Holdings demonstrates strong cash flow management with a free cash flow growth rate of 24.6% in TTM. The operating cash flow to net income ratio is slightly above 1, indicating good cash generation relative to net income. The free cash flow to net income ratio is also strong, suggesting efficient cash utilization.75
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 281.74M | 295.60M | 293.79M | 267.62M | 195.26M | 132.33M |
| Gross Profit | 223.59M | 254.62M | 175.29M | 163.16M | 114.58M | 73.82M |
| EBITDA | 50.87M | 34.68M | 67.02M | 84.59M | 60.15M | 22.13M |
| Net Income | 16.56M | 3.01M | 29.25M | 46.04M | 30.34M | -6.31M |
Balance Sheet | ||||||
| Total Assets | 597.41M | 584.36M | 610.88M | 530.74M | 364.62M | 360.93M |
| Cash, Cash Equivalents and Short-Term Investments | 29.35M | 32.35M | 21.02M | 35.98M | 35.69M | 15.61M |
| Total Debt | 272.68M | 272.25M | 277.90M | 241.26M | 151.10M | 168.50M |
| Total Liabilities | 328.11M | 321.25M | 329.56M | 288.98M | 185.40M | 208.63M |
| Stockholders Equity | 269.55M | 263.36M | 281.58M | 241.27M | 179.82M | 152.72M |
Cash Flow | ||||||
| Free Cash Flow | 42.27M | 31.28M | 18.75M | 40.51M | 28.48M | 9.90M |
| Operating Cash Flow | 51.34M | 55.88M | 59.13M | 64.51M | 41.99M | 15.63M |
| Investing Cash Flow | -26.01M | -21.02M | -64.82M | -67.80M | -6.81M | -994.00K |
| Financing Cash Flow | -30.67M | -23.54M | -9.26M | 3.58M | -15.10M | -13.13M |
RCI Hospitality Holdings Technical Analysis
Negative
36.27
Price Trends
38.30
Negative
39.39
Negative
45.38
Negative
Market Momentum
-0.50
Negative
44.24
Neutral
47.89
Neutral
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 36.27 is below the 20-day moving average (MA) of 36.43, below the 50-day MA of 38.30, and below the 200-day MA of 45.38, indicating a bearish trend. The MACD of -0.50 indicates Negative momentum. The RSI at 44.24 is Neutral, neither overbought nor oversold. The STOCH value of 47.89 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
69 Neutral | $57.25M | 13.25 | 6.88% | 1.73% | 8.83% | 41.90% | |
64 Neutral | $317.08M | 19.50 | 6.12% | 0.77% | -5.34% | 256.61% | |
60 Neutral | C$4.76B | 7.23 | 23.69% | 3.62% | 3.22% | 5.88% | |
59 Neutral | $708.03M | ― | -48.66% | ― | ― | ― | |
46 Neutral | $108.02M | 36.29 | -5.04% | 0.91% | 10.67% | -181.88% | |
42 Neutral | $83.27M | ― | -7.81% | ― | 96.64% | -292.65% | |
40 Neutral | $85.64M | ― | ― | -14.11% | 54.77% |
* Consumer Cyclical Sector Average
Performance Comparison
RICK
RCI Hospitality Holdings
36.27
-9.78
-21.24%
BDL
Flanigan's Enterprises
31.76
6.02
23.39%
STKS
The ONE Group Hospitality
2.74
-1.23
-30.98%
THCH
TH International
2.48
-0.96
-27.91%
GENK
GEN Restaurant Group, Inc. Class A
3.18
-5.98
-65.28%
VENU
Venu Holding Corporation
18.10
7.30
67.59%
RCI Hospitality Holdings Corporate Events
Shareholder Meetings
RCI Hospitality Holds Successful Annual Stockholders Meeting
Positive
Aug 18, 2025
On August 18, 2025, RCI Hospitality Holdings held its Annual Meeting of Stockholders in Houston, Texas, to elect six directors, ratify the selection of CBIZ CPAs P.C. as the independent registered public accounting firm for the fiscal year ending September 30, 2025, and approve a non-binding advisory resolution on executive compensation. All director nominees were elected, the accounting firm selection was ratified, and the executive compensation resolution was approved, reflecting strong support from the stockholders.
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.