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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:
$4.50
▼(-2.39% 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 EBITDA & FCF
Sustained improvement in core profitability and a return to positive free cash flow in 2025 indicate the business can generate operating cash to fund capex and working capital. Over months this strengthens the firm's ability to pay down debt, invest in initiatives, and reduces reliance on external financing.
Restaurant-level margin & labor efficiency
Structural labor and operating efficiency gains that materially lifted restaurant-level margins point to durable margin expansion potential. Lower hourly turnover and process improvements reduce recurring payroll inflation exposure and preserve unit economics across the system over quarters.
Menu pricing & product strategy
Demonstrated ability to implement modest price increases and launch value-tier platforms that raise average check supports pricing power and mix improvement. When paired with targeted marketing, this provides a repeatable lever to drive revenue per guest without broad discounting.
Negative Factors
Weak balance sheet / negative equity
Negative equity and substantial debt materially constrain financial flexibility, heighten refinancing and covenant risk, and limit the company’s capacity to absorb downcycles. This structural leverage profile raises long-term interest sensitivity and reduces strategic optionality.
Traffic and revenue softness
Persistent traffic declines undermine the top-line base and limit operating leverage, forcing reliance on price or marketing to sustain revenue. If traffic recovery stalls, sustained higher selling expense and pricing risk erode margins and make previous unit-level margin gains harder to sustain.
Commodity inflation & modest liquidity
Ongoing beef and commodity inflation is a structural margin headwind for a burger-centric chain. Combined with limited cash buffers and dependence on revolver availability and refranchising/refinancing, this raises downside risk to margins and the company’s ability to smooth through cost shocks.
Red Robin Gourmet (RRGB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$90.91M
Dividend YieldN/A
Average Volume (3M)337.53K
Price to Earnings (P/E)―
Beta (1Y)1.76
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. Volume666,042
30 Day Avg. Volume337,529
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 Cap6.34
Enterprise Value/Revenue0.48
Enterprise Value/Gross Profit1.78
Enterprise Value/Ebitda10.67
Forecast
1Y Price Target
$10.83Price Target Upside134.92% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
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 makes money primarily through the sale of food and beverages in its restaurants. The company generates revenue from dine-in services, takeout orders, and catering services. Key revenue streams include the sale of gourmet burgers, sides, appetizers, and drinks, along with special promotions and seasonal menu items. Additionally, Red Robin benefits from franchise agreements that allow independent operators to run Red Robin locations, providing the company with franchise fees and a percentage of sales. The brand also engages in partnerships with third-party delivery services to expand its reach and convenience for customers, contributing to overall sales growth.
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
Positive
4.61
Price Trends
3.96
Positive
4.49
Positive
5.20
Negative
Market Momentum
0.15
Negative
62.71
Neutral
79.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RRGB, the sentiment is Positive. The current price of 4.61 is above the 20-day moving average (MA) of 3.80, above the 50-day MA of 3.96, and below the 200-day MA of 5.20, indicating a neutral trend. The MACD of 0.15 indicates Negative momentum. The RSI at 62.71 is Neutral, neither overbought nor oversold. The STOCH value of 79.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RRGB.
Red Robin Gourmet Risk Analysis
Red Robin Gourmet disclosed 35 risk factors in its most recent earnings report. Red Robin Gourmet reported the most risks in the "Production" 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 | $3.14B | 21.19 | 33.74% | 2.11% | 4.90% | 27.14% | |
65 Neutral | $61.63M | 10.53 | 7.97% | 1.89% | 8.99% | 49.97% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
54 Neutral | $395.04M | 27.67 | ― | 5.10% | 6.47% | -62.84% | |
47 Neutral | $90.91M | ― | ― | ― | -3.61% | 2.06% | |
45 Neutral | $293.54M | -4.19 | ― | 9.34% | -6.75% | -118.94% |
* Consumer Cyclical Sector Average
RRGB
Red Robin Gourmet
4.61
-0.26
-5.34%
DIN
Dine Brands Global
30.28
7.85
34.99%
BDL
Flanigan's Enterprises
33.16
8.58
34.91%
JACK
Jack In The Box
15.42
-19.90
-56.34%
CAKE
Cheesecake Factory
62.95
12.70
25.28%
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.