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Red Robin Gourmet (RRGB)
NASDAQ:RRGB
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Red Robin Gourmet
(NASDAQ:RRGB)
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Rating:47Neutral
Price Target:
$3.00
▼(-5.06% Downside)
Action:ReiteratedDate:03/03/26
The score is held down primarily by weak financial fundamentals—especially negative equity, high debt, and ongoing net losses—despite improving EBITDA and a return to positive free cash flow in 2025. Technicals show a near-term recovery but not a fully repaired long-term trend, while valuation is constrained by negative earnings. Earnings call guidance is constructive, but traffic softness, inflation, and liquidity dependence temper the upside.
Positive Factors
Improving Cash Generation
Sustained improvement in operating cash flow and a return to positive free cash flow provide durable financing flexibility for reinvestment, debt service, and capex. If sustained, this supports deleveraging initiatives and reduces reliance on external funding over the next several quarters.
Adjusted EBITDA & Margin Recovery
Material EBITDA expansion and restored restaurant-level margins imply improving unit economics and operating leverage. These underlying profitability gains increase resilience to revenue variability and create a stronger base for sustained cash generation and potential future net-profitability conversion.
Operational Efficiency & Execution
Demonstrated cost takeout (labor and G&A), targeted refranchising plans and technology investments indicate scalable structural improvements. These durable operational fixes can lower ongoing costs, stabilize margins and improve unit economics across the footprint over multiple quarters.
Negative Factors
Weak Balance Sheet
Negative equity and elevated debt materially constrain financial flexibility and increase refinancing and interest-rate sensitivity. This structural capital weakness limits the company's ability to absorb shocks, fund growth, or execute aggressive buybacks without material balance-sheet repairs.
Flat-to-Declining Revenues & Traffic
Persistent flat or declining top-line and weakening traffic constrain operating leverage and cap the upside from unit-level margin improvements. Without sustained comp recovery, margin gains risk being offset by lower throughput, limiting durable profit growth and cash-generation scaling.
Commodity Inflation & Higher Marketing
Ongoing beef-driven commodity cost pressure combined with higher selling spend to drive traffic creates a structural margin headwind. If commodity inflation and elevated marketing persist, they can erode sustained margin improvements and force trade-offs between traffic-driving spend and long-term profitability.
Red Robin Gourmet (RRGB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$57.12M
Dividend YieldN/A
Average Volume (3M)403.34K
Price to Earnings (P/E)―
Beta (1Y)1.92
Revenue Growth-3.61%
EPS Growth2.06%
CountryUS
Employees21,443
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)-0.41
Shares Outstanding18,074,472
10 Day Avg. Volume318,922
30 Day Avg. Volume403,342
Financial Highlights & Ratios
PEG Ratio0.04
Price to Book (P/B)-0.69
Price to Sales (P/S)0.06
P/FCF Ratio11.80
Enterprise Value/Market Cap9.66
Enterprise Value/Revenue0.46
Enterprise Value/Gross Profit1.70
Enterprise Value/Ebitda10.21
Forecast
1Y Price Target
$12.75Price Target Upside303.48% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)-0.5
Revenue Forecast (FY)$1.16B
Red Robin Gourmet Business Overview & Revenue Model
Company DescriptionRed Robin Gourmet Burgers, Inc., together with its subsidiaries, develops, operates, and franchises full-service and casual-dining restaurants. The company's restaurants primarily offer burgers and shareable pizzas; various appetizers, salads, soups, sandwiches, seafood, and other entrees; and desserts, wings, milkshakes, alcoholic and non-alcoholic specialty drinks, cocktails, wine, and beers. As of December 26, 2021, it operated approximately 531 Red Robin restaurants, including 430 were company-owned and 101 were operated by franchisees in the United States and one Canadian province. Red Robin Gourmet Burgers, Inc. was founded in 1969 and is based in Greenwood Village, Colorado.
How the Company Makes MoneyRed Robin primarily makes money by selling food and beverages to guests through its company-owned restaurants. Revenue is generated per transaction from menu item purchases (e.g., burgers and other entrées, sides, appetizers, desserts) and beverage sales, with additional sales coming from off-premises orders such as takeout and delivery where available. A smaller, separate revenue stream comes from franchising: franchisees pay fees and/or royalties to use the Red Robin brand and operating system (specific fee structures not provided here). Overall earnings are driven by restaurant-level traffic and average check, menu pricing and product mix (including beverage mix), effectiveness of promotions and loyalty/marketing programs, and the scale of off-premises sales. Delivery sales may also be influenced by arrangements with third-party delivery marketplaces (specific partners and financial terms not provided here).
Red Robin Gourmet Key Performance Indicators (KPIs)
Any
Restaurant Count
Tracks the total number of restaurants, reflecting the company’s scale and market presence. Growth in this number can signal expansion and increased market share.
Tracks the total number of restaurants, reflecting the company’s scale and market presence. Growth in this number can signal expansion and increased market share.
Data provided by:
The Fly
The FlyRed Robin Gourmet Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 27, 2026
Earnings Call Sentiment Positive
The call conveyed clear operational and financial progress—material adjusted EBITDA growth (53%), margin expansion, labor efficiencies, targeted marketing gains, menu enhancements and cost reductions—combined with constructive 2026 guidance. However, challenges remain: comparable sales and traffic declines, commodity/beef inflation, weather-driven disruption, elevated selling expense to fuel marketing, and modest cash balances. On balance, the positive improvements in profitability, efficiency and strategic execution outweigh the near-term top-line and external headwinds.Q4-2025 Updates
Positive Updates
Strong Adjusted EBITDA and Profitability Gains
Full-year adjusted EBITDA of $69.7 million, representing 53% growth versus 2024; fourth-quarter adjusted EBITDA of $11.8 million, which was ahead of expectations.
Restaurant-Level Margin and Labor Efficiency Improvements
RLOP margin grew by 190 basis points for the year; labor-efficiency initiatives contributed approximately 180 basis points to restaurant-level margin and total labor costs were reduced by ~250 basis points in 2025 while maintaining guest satisfaction.
Effective Pricing and New Menu Strategy
Minimal net pricing in 2025 (net pricing contributed ~1.6% in Q4). New menu launched Jan 26 with a 3.2% menu price increase (expected to carry through 2026) and an expanded Big Yummm platform (6 meal options, $9.99–$16.99). Early results show average check increases and healthy guest engagement.
Traffic Momentum from Value Offer and Targeted Marketing
December outpaced the Black Box casual dining traffic index; Big Yummm $9.99 delivered 10% guest mix in dine-in in Q4. Company has implemented data-driven, micro-targeted marketing (about two-thirds complete), improving message relevancy and marketing efficiency.
G&A and Cost Savings Progress
General & administrative expenses reduced by over $4 million in 2025 excluding stock-based compensation. 2026 G&A guidance is ~$65–67 million (versus $71 million in 2025 excluding stock comp), indicating continued structural savings.
Improved Liquidity and Capital-Structure Actions
Ended Q4 with $19.9 million cash, $9.6 million restricted cash, and $37 million availability on revolver. ATM program terminated (no shares issued) and tactical refranchising discussions progressing to reduce debt and strengthen the balance sheet.
Operational Investments and Workforce Improvements
Completed 20 light-touch restaurant refreshes in 2025; 2026 capex guidance $25–30 million. Rolling out new server handhelds and upgraded Ziosk devices; launched enterprise ChatGPT with restaurant-level GPT tools. Hourly turnover is at its lowest level since 2017 and engagement scores are improving.
2026 Financial Guidance
Provided 2026 guidance: comparable restaurant revenues +0.5% to +1.5% (ex-deferred loyalty), restaurant-level operating margin ~13%, adjusted EBITDA $70–73 million, and capex $25–30 million, signaling expected continued progress.
Negative Updates
Comparable Sales and Traffic Declines
Full-year comparable sales down 0.3% (ex-deferred loyalty). Q4 comparable sales down 3.3% excl. deferred loyalty (down 3.1% incl. deferred). Q4 average check +0.3% but traffic declined 3.6%; full-year average check +3.5% offset by traffic -3.8%.
Q4 Revenue and Year/Quarter EBITDA Pressure
Total revenues in Q4 were $269 million, down $16.2 million versus 2024. Q4 adjusted EBITDA was $11.8 million, a decrease of $2.6 million versus Q4 2024 (although above internal expectations).
Commodity Cost and Beef Inflation Headwinds
Commodities were up roughly 4% in 2025 and management expects similar pressure in 2026; beef inflation remains the primary outlier and is expected to continue to create COGS headwinds.
Weather-Driven Volatility
Winter Storm Fern in late January caused choppy results and temporary restaurant closures; management estimates weather cost the company ~50 basis points to Q1 comparable sales and resulted in ~179 lost operating days quarter-to-date.
Selling Expense Increase to Support Marketing
Selling expenses rose to $8.8 million in Q4 versus $5.7 million in Q4 2024; management expects selling expense to be higher in 2026 as additional marketing dollars are deployed to support the micro-targeted strategy.
Slight Q4 Restaurant-Level Margin Decline
Restaurant-level operating margin was 11.4% in Q4, down 10 basis points versus the fourth quarter of 2024, as benefits from cost savings were partially offset by inflation and lower traffic.
Remaining Underperforming Restaurants and Portfolio Cleanup
Management reduced an earlier estimated $6 million headwind from potential closures to about a $1.5 million headwind remaining; continued lease expirations and portfolio optimization are still required.
Modest Cash Balances and Dependence on Financing Actions
Cash balance was relatively modest at $19.9 million (plus $9.6 million restricted); the company is relying on revolver availability ($37 million), refranchising proceeds and refinancing to further strengthen the balance sheet.
Company Guidance
The company guided 2026 comparable restaurant revenues (ex‑deferred loyalty) of +0.5% to +1.5%, with a full‑year menu pricing carry of roughly 3.2%, restaurant‑level operating profit margin of about 13%, adjusted EBITDA of $70–$73 million, and capital expenditures of $25–$30 million; management also said selling expense will be up versus 2025 (and likely up each quarter), G&A (ex‑stock‑based comp) is targeted at roughly $65–$67 million, commodity inflation was ~4% in 2025 and is expected to be roughly similar in 2026 with beef as the primary pressure, Q1 quarter‑to‑date comps were down ~1% with weather estimated to cost ~50 basis points (about 179 lost operating days) in Q1, and liquidity at year‑end included $19.9 million cash, $9.6 million restricted cash and $37 million of revolver capacity.Red Robin Gourmet Financial Statement Overview
Summary
Operations improved in 2025 (EBIT slightly positive, EBITDA margin rebounded, and free cash flow turned positive), but the financial profile remains pressured by persistent net losses, flat-to-down revenue, and a highly stressed balance sheet with negative equity and substantial debt.Income Statement
Revenue has been broadly flat to down in the last two years (2025 down ~1% and 2024 down ~4%), limiting operating leverage. Profitability improved meaningfully versus 2024 as EBITDA margin rebounded to ~4.5% in 2025 (from ~0.4% in 2024) and EBIT moved to slightly positive, but net income remained negative in every year shown. Gross margin looks strong in 2024–2025 (~68%), yet persistent net losses suggest overhead, interest costs, and/or non-operating items continue to weigh on bottom-line results.38
Negative
Balance Sheet
The balance sheet is the key weak spot: stockholders’ equity is negative in 2023–2025, which reduces financial flexibility and makes leverage risk harder to absorb in a downturn. Total debt remains high (about $514M in 2025), and with negative equity, traditional leverage signals are unfavorable despite some reduction from 2024. Total assets declined from 2020–2025, reinforcing a picture of constrained balance-sheet capacity and elevated refinancing/interest-rate sensitivity.22
Negative
Cash Flow
Cash generation improved in 2025 with operating cash flow rising to ~$37M (from ~$7M in 2024) and free cash flow turning positive (~$6M) after a negative 2024. That said, free cash flow has been volatile (notably negative in 2022–2024), and free cash flow relative to net income remains weak given ongoing losses. Overall, cash flow is trending better recently but still lacks consistency for a higher score.41
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.21B | 1.25B | 1.30B | 1.27B | 1.16B |
| Gross Profit | 822.38M | 852.81M | 417.79M | 419.59M | 394.36M |
| EBITDA | 54.05M | 5.38M | 71.83M | 18.75M | 47.02M |
| Net Income | -23.28M | -77.54M | -21.23M | -78.88M | -50.44M |
Balance Sheet | |||||
| Total Assets | 563.53M | 641.31M | 741.93M | 832.14M | 929.00M |
| Cash, Cash Equivalents and Short-Term Investments | 19.92M | 30.65M | 23.63M | 48.83M | 22.75M |
| Total Debt | 513.91M | 585.12M | 610.79M | 657.13M | 672.89M |
| Total Liabilities | 669.88M | 725.58M | 762.38M | 830.36M | 852.02M |
| Stockholders Equity | -106.35M | -84.27M | -20.44M | 1.79M | 76.97M |
Cash Flow | |||||
| Free Cash Flow | 6.22M | -18.99M | -50.60M | -2.63M | 5.03M |
| Operating Cash Flow | 37.01M | 7.05M | -1.16M | 35.53M | 47.29M |
| Investing Cash Flow | -24.62M | -1.75M | 8.23M | -29.57M | -42.24M |
| Financing Cash Flow | -22.25M | 2.54M | -33.71M | 29.53M | 1.56M |
Red Robin Gourmet Technical Analysis
Negative
3.16
Price Trends
3.87
Negative
4.12
Negative
5.21
Negative
Market Momentum
-0.17
Positive
36.98
Neutral
10.51
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RRGB, the sentiment is Negative. The current price of 3.16 is below the 20-day moving average (MA) of 3.92, below the 50-day MA of 3.87, and below the 200-day MA of 5.21, indicating a bearish trend. The MACD of -0.17 indicates Positive momentum. The RSI at 36.98 is Neutral, neither overbought nor oversold. The STOCH value of 10.51 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RRGB.
Red Robin Gourmet Risk Analysis
Red Robin Gourmet disclosed 37 risk factors in its most recent earnings report. Red Robin Gourmet 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
Red Robin Gourmet Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $2.85B | 15.71 | 37.06% | 2.11% | 4.90% | 27.14% | |
65 Neutral | $57.88M | 17.07 | 8.92% | 1.89% | 8.99% | 49.97% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
54 Neutral | $370.78M | 27.16 | -7.32% | 5.10% | 6.47% | -62.84% | |
49 Neutral | $213.01M | 2.44 | 7.30% | 9.34% | -6.75% | -118.94% | |
47 Neutral | $57.12M | -3.16 | 25.76% | ― | -3.61% | 2.06% |
* Consumer Cyclical Sector Average
RRGB
Red Robin Gourmet
3.16
-0.96
-23.30%
DIN
Dine Brands Global
28.42
5.23
22.53%
BDL
Flanigan's Enterprises
31.14
6.56
26.69%
JACK
Jack In The Box
11.00
-18.48
-62.69%
CAKE
Cheesecake Factory
57.15
9.41
19.71%
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.