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Red Robin Gourmet (RRGB)
NASDAQ:RRGB
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Red Robin Gourmet
(NASDAQ:RRGB)
Rating:38Underperform
Price Target:―
Positive Factors
Financial Performance
Red Robin announced that its expected AEBITDA results will exceed prior guidance, indicating better-than-expected financial performance.
Strategic Leadership
The CEO transition to David Pace, who has extensive experience in the restaurant industry, is expected to enhance the company's forward marketing strategy and operational improvements.
Negative Factors
Revenue Guidance
Management issued 2025 revenue guidance that was below expectations due to upcoming restaurant closures.
Red Robin Gourmet (RRGB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$54.45M
Dividend YieldN/A
Average Volume (3M)281.47K
Price to Earnings (P/E)―
Beta (1Y)1.30
Revenue Growth-4.19%
EPS Growth-266.52%
CountryUS
Employees21,443
SectorConsumer Cyclical
Sector Strength74
IndustryRestaurants
Share Statistics
EPS (TTM)-0.94
Shares Outstanding17,620,900
10 Day Avg. Volume161,759
30 Day Avg. Volume281,473
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)-0.53
Price to Sales (P/S)0.00
P/FCF Ratio-2.58
Enterprise Value/Market Cap10.96
Enterprise Value/Revenue0.12
Enterprise Value/Gross Profit4.99
Enterprise Value/Ebitda4.43
Forecast
1Y Price Target
$11.00Price Target Upside280.62% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
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 Gourmet Burgers, Inc. primarily generates revenue through the operation of its company-owned restaurants and by collecting royalties from its franchised locations. The majority of the company's income comes from the sale of food and beverages at its restaurants, where it offers a diverse menu that includes gourmet burgers, appetizers, entrees, and drinks. Additionally, Red Robin benefits from its franchising model, earning a percentage of sales from its franchised restaurants in the form of royalties and related fees. The company also leverages marketing partnerships and promotional activities to drive customer traffic and enhance brand visibility, which contributes to overall earnings.
Red Robin Gourmet Financial Statement Overview
Summary
Red Robin Gourmet faces significant financial challenges, with declining revenues, negative equity, and cash flow issues. The company needs to address profitability and solvency to improve its financial health, with particular attention to stabilizing operations and managing debt.Income Statement
Red Robin Gourmet has faced declining revenues, with a negative revenue growth rate of -4.17% from 2023 to 2024. The company also experienced negative net and EBIT margins, indicating profitability challenges. Despite a positive EBITDA margin in 2023, the overall financial health in terms of profitability is weak.35
Negative
Balance Sheet
The company's balance sheet is concerning, with negative stockholders' equity in 2023, indicating insolvency risks. The debt-to-equity ratio is not calculable due to negative equity, and the equity ratio is effectively zero, further highlighting financial instability.20
Very Negative
Cash Flow
While Red Robin's free cash flow improved slightly from -$50.6 million in 2023 to -$18.9 million in 2024, it remains negative, suggesting ongoing cash flow challenges. The operating cash flow to net income ratio is not favorable, but there is a slight improvement in operational cash flows.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.25B | 1.30B | 1.27B | 1.16B | 868.72M | Gross Profit |
| 852.81M | 192.79M | 420.68M | 394.80M | 237.88M | EBIT |
| -53.08M | 4.54M | -56.41M | -36.70M | -275.15M | EBITDA |
| 5.38M | 71.83M | 18.75M | 47.46M | -185.83M | Net Income Common Stockholders |
| -77.54M | -21.23M | -77.80M | -50.00M | -276.07M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 30.65M | 23.63M | 48.83M | 22.75M | 16.12M | Total Assets |
| 641.31M | 741.93M | 832.14M | 929.00M | 974.74M | Total Debt |
| 578.38M | 618.54M | 647.08M | 660.93M | 691.15M | Net Debt |
| 547.73M | 587.16M | 598.25M | 638.18M | 675.04M | Total Liabilities |
| 725.58M | 762.38M | 826.77M | 852.02M | 854.03M | Stockholders Equity |
| -84.27M | -20.44M | 5.38M | 76.97M | 120.71M |
| Cash Flow | Free Cash Flow | |||
| -18.99M | -50.60M | -2.63M | 5.03M | -1.90M | Operating Cash Flow |
| 7.05M | -1.16M | 35.53M | 47.29M | 20.23M | Investing Cash Flow |
| -1.75M | 8.23M | -29.57M | -42.24M | -21.39M | Financing Cash Flow |
| 2.54M | -33.71M | 29.53M | 1.56M | -11.70M |
Red Robin Gourmet Technical Analysis
Negative
2.89
Price Trends
3.29
Negative
4.35
Negative
4.64
Negative
Market Momentum
-0.04
Negative
44.43
Neutral
53.52
Neutral
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 2.89 is below the 20-day moving average (MA) of 2.90, below the 50-day MA of 3.29, and below the 200-day MA of 4.64, indicating a bearish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 44.43 is Neutral, neither overbought nor oversold. The STOCH value of 53.52 is Neutral, 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 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 1 New Risks
1.
Damage to our brand image or reputation, including due to unfavorable social and digital media, could adversely impact our business. Q4, 2024
Red Robin Gourmet Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $2.66B | 16.84 | 46.60% | 2.01% | 4.42% | 48.23% | |
73 Outperform | $308.96M | 7.12 | 117.47% | ― | -3.96% | 1036.87% | |
70 Neutral | $930.86M | 44.27 | 6.01% | ― | 2.91% | -4.86% | |
66 Neutral | $1.25B | 34.98 | 7.80% | 1.78% | 2.26% | -56.99% | |
62 Neutral | $6.97B | 11.36 | 2.77% | 3.91% | 2.66% | -22.00% | |
60 Neutral | $201.42M | 11.10 | -63.40% | ― | -0.53% | -24.19% | |
38 Underperform | $54.45M | ― | 92.02% | ― | -4.19% | -266.52% |
* Consumer Cyclical Sector Average
Performance Comparison
RRGB
Red Robin Gourmet
2.89
-3.87
-57.25%
BJRI
BJ's Restaurants
41.57
6.72
19.28%
CBRL
Cracker Barrel
54.75
10.05
22.48%
DENN
Denny's
3.65
-3.50
-48.95%
CAKE
Cheesecake Factory
52.52
16.56
46.05%
PBPB
Potbelly
10.01
1.55
18.32%
Red Robin Gourmet Earnings Call Summary
Earnings Call Date:Feb 26, 2025
(Q4-2024)
| % Change Since: -36.06%|
Next Earnings Date:May 29, 2025
Earnings Call Sentiment Neutral
Red Robin demonstrated significant improvements in traffic trends, guest satisfaction, and loyalty program growth. However, challenges such as declining total revenues, planned restaurant closures, and increased discount levels indicated a mixed performance. Despite these challenges, the positive aspects, particularly in operational improvements and customer engagement, suggest a cautiously optimistic outlook.Q4-2024 Updates
Positive Updates
Improvement in Traffic Trends
Red Robin reported a 600 basis point improvement in traffic trends from Q1 to Q4 of 2024, indicating successful initiatives to drive restaurant traffic.
Increase in Guest Satisfaction Scores
Dine-in guest satisfaction scores increased by approximately 8 percentage points in 2024 compared to 2023, beating the casual dining average.
Growth in Loyalty Program Membership
The revamped Red Robin Royalty program spurred membership growth of approximately 1.5 million members in 2024, ending the year with approximately 14.9 million members.
Comparable Restaurant Revenue Growth
The company delivered a 3.4% increase in comparable restaurant revenue in Q4 2024, excluding the impact of deferred loyalty revenue.
Increase in Adjusted EBITDA
Adjusted EBITDA increased by 19% to $12.7 million during Q4 2024, showing successful management of operational costs.
Successful Managing Partner Compensation Program
The Managing Partner Compensation Program has been successfully launched, aligning operators around a unified goal of driving growth in traffic and profit dollars.
Negative Updates
Decline in Total Revenues
Total revenues were $285.2 million in Q4 2024 compared to $309 million in Q4 2023, primarily due to a reduction in operating weeks from 13 to 12.
Restaurant Closures
Red Robin plans to close 10 to 15 restaurants in 2025, part of a strategy to address approximately 70 underperforming locations that generated a restaurant-level operating loss in 2024.
Increased Discount Levels
Discount levels increased by approximately 120 basis points compared to the previous year, impacting restaurant-level operating profit.
Cash Burn from Underperforming Restaurants
The underperforming restaurants caused a cash burn of approximately $9.5 million in 2024, impacting overall profitability.
Company Guidance
During the Red Robin Gourmet Burgers Fourth Quarter 2024 Earnings Call, the company highlighted several metrics reflecting its progress and future guidance. They reported a 600 basis point improvement in traffic trends from the first to the fourth quarter of 2024, and an 8 percentage point increase in dine-in guest satisfaction scores compared to 2023. The revamped Red Robin Royalty program contributed to membership growth, ending the year with approximately 14.9 million members. For Q4, comparable restaurant revenue increased by 3.4%, with adjusted EBITDA rising 19% to $12.7 million. Looking forward, Red Robin aims for 2025 total revenue between $1.225 billion and $1.25 billion, with restaurant-level operating profit expected to improve by 120 to 220 basis points, and adjusted EBITDA projected at $60 to $65 million. They also plan to close 10 to 15 underperforming restaurants during 2025.Red Robin Gourmet Corporate Events
Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
Red Robin Gourmet Appoints New CEO David A. Pace
Positive
Apr 24, 2025
On April 24, 2025, Red Robin Gourmet Burgers, Inc. announced a leadership transition with David A. Pace appointed as the new President and CEO, succeeding G.J. Hart. Mr. Hart, who has been instrumental in transforming Red Robin into an operations-focused restaurant company, will remain as a senior advisor until September 2025. The transition aims to continue the company’s growth and improve its financial performance, with Mr. Pace bringing extensive industry experience to lead the next phase of transformation. The company also expects a positive financial outlook for the first quarter of 2025, with anticipated increases in comparable restaurant sales and adjusted EBITDA.
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.