The ONE Group Hospitality (STKS) AI Stock Analysis

• Market Cap: $109.70M
• Dividend Yield: N/A
• Average Volume (3M): 57.26K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.28
• Revenue Growth: 138.50%
• EPS Growth: -60576.19%
• Country: US
• Employees: 10,800
• Sector: Consumer Cyclical
• Sector Strength: 62
• Industry: Restaurants
• EPS (TTM): 0.14
• Shares Outstanding: 30,902,798
• 10 Day Avg. Volume: 37,910
• 30 Day Avg. Volume: 57,259
• PEG Ratio: 0.20
• Price to Book (P/B): 3.25
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -4.81
• Enterprise Value/Market Cap: 3.83
• Enterprise Value/Revenue: 0.21
• Enterprise Value/Gross Profit: 2.25
• Enterprise Value/Ebitda: 1.98
• 1Y Price Target: $4.80
• Price Target Upside: 30.08% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 50 Neutral
• Price Target: $3.50 ▼(-5.15%Downside)

The ONE Group Hospitality's stock reflects a mix of financial challenges and positive strategic growth. The most significant factor is the company's financial performance, which is hampered by net losses and high leverage. However, the earnings call provided a more positive outlook due to strong revenue growth and strategic initiatives. Technical analysis shows mixed momentum, and valuation remains a concern due to negative earnings.

Positive Factors

Acquisition Impact

The May 2024 Benihana/RA Sushi acquisition is a transformational event for the ONE Group, more than doubling run rate revenue and adjusted EBITDA.

Growth Potential

ONE Group is a leader in the 'Vibe Dining' subsegment, which is projected to continue to grow at above average rates.

Negative Factors

Economic Environment

Economic uncertainty remains an overhang to posting solid SSS growth, with modest negative SSS expected in 1Q25.

Valuation Challenges

Current valuation reflects a lack of near- to medium-term SSS growth visibility across all brands, complicated by the financing costs of the acquisition of Benihana.

The ONE Group Hospitality Business Overview & Revenue Model

Company Description

The ONE Group Hospitality, Inc., a hospitality company, develops, owns, operates, manages, and licenses restaurants and lounges worldwide. It operates through STK, Kona Grill, and ONE Hospitality segments. The company also provides turn-key food and beverage services for hospitality venues, including hotels, casinos, and other locations. Its hospitality food and beverage solutions include developing, managing, and operating restaurants, bars, rooftops, pools, banqueting, catering, private dining rooms, room service, and mini bars; and offers hospitality advisory and consulting services. The company operates restaurants primarily under the STK and Kona Grill brands. As of December 31, 2021, it owned, operated, managed, or licensed 60 venues, including 23 STKs and 24 Kona Grills in North America, Europe, and the Middle East, as well as 13 F&B venues in seven hotels and casinos in the United States and Europe. The ONE Group Hospitality, Inc. was founded in 2004 and is headquartered in Denver, Colorado.

How the Company Makes Money

The ONE Group Hospitality primarily generates revenue through its chain of STK restaurants. The company's revenue model includes several streams: dining services, where revenue is earned through food and beverage sales in their upscale restaurants; event hosting, where venues are rented out for private events and parties; and management and licensing fees, which come from managing and licensing the STK brand to third-party operators in various locations. The company also benefits from strategic partnerships and collaborations with hospitality and entertainment brands, enhancing its market reach and brand visibility. Additionally, The ONE Group leverages its loyalty and rewards programs to encourage repeat business and increase customer spending.

The ONE Group Hospitality Financial Statement Overview

Summary

The ONE Group Hospitality faces financial challenges with negative net profit margins and high leverage. Despite strong gross profit margins and effective cash generation from operations, concerns remain due to net losses and high debt levels.

Income Statement

The company's gross profit margin for TTM is approximately 56.5%, indicating a healthy ability to cover its cost of goods sold. However, the net profit margin is negative due to a net loss, highlighting challenges in achieving profitability. Revenue growth is volatile, with a decline noted in the most recent TTM period compared to the previous year. EBIT and EBITDA margins are low, reflecting modest operational efficiency.

Balance Sheet

The debt-to-equity ratio is high, with total debt significantly exceeding stockholders' equity, indicating potential leverage risks. Return on equity is negative due to net losses, which is a concern for investors. The equity ratio is relatively low, suggesting limited financial flexibility and reliance on debt financing.

Cash Flow

The operating cash flow to net income ratio is strong, indicating effective cash generation from operations despite net losses. Free cash flow is negative, impacting liquidity and financial flexibility. The company has a high level of capital expenditures, which may constrain cash flow further.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
330.86M	673.34M	332.77M	316.64M	277.18M	141.94M
	Gross Profit
186.94M	122.75M	65.79M	66.58M	65.18M	20.88M
	EBIT
3.93M	10.77M	9.29M	23.39M	19.39M	7.04M
	EBITDA
34.84M	40.72M	34.02M	31.35M	38.57M	6.79M
	Net Income Common Stockholders
-22.64M	-15.82M	4.72M	13.53M	31.35M	-13.62M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
21.92M	28.07M	21.05M	55.12M	23.61M	24.39M
	Total Assets
956.02M	959.35M	317.25M	291.02M	229.84M	215.57M
	Total Debt
310.37M	641.02M	200.17M	183.63M	132.64M	159.09M
	Net Debt
288.44M	613.44M	179.12M	128.51M	109.03M	134.71M
	Total Liabilities
752.89M	756.75M	249.88M	222.43M	169.31M	193.59M
	Stockholders Equity
40.46M	205.25M	69.18M	69.71M	61.20M	23.18M
Cash Flow		Free Cash Flow
-27.37M	-27.37M	-22.77M	-7.38M	19.50M	-5.36M
	Operating Cash Flow
44.19M	44.19M	30.78M	25.25M	30.97M	431.00K
	Investing Cash Flow
-441.39M	-441.39M	-53.55M	-32.63M	-11.47M	-5.79M
	Financing Cash Flow
404.34M	404.34M	-11.25M	39.10M	-20.27M	17.42M

The ONE Group Hospitality Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.69
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STKS, the sentiment is Positive. The current price of 3.69 is below the 20-day moving average (MA) of 3.81, above the 50-day MA of 3.29, and above the 200-day MA of 3.31, indicating a neutral trend. The MACD of 0.04 indicates Positive momentum. The RSI at 50.39 is Neutral, neither overbought nor oversold. The STOCH value of 32.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STKS.

The ONE Group Hospitality Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BDL	74 Outperform	$61.71M	15.24	6.48%	1.51%	9.38%	14.76%
Sector *	62 Neutral	$6.88B	11.32	2.90%	3.87%	2.70%	-24.57%
STKS	50 Neutral	$109.70M	―	-9.31%	―	138.50%	-60576.19%
FAT	44 Neutral	$43.92M	―	38.50%	22.76%	10.63%	-93.67%
RRGB	43 Neutral	$117.41M	―	92.02%	―	-1.68%	-140.83%
NDLS	43 Neutral	$36.80M	―	-978.37%	―	-0.61%	-200.32%
THCH	38 Underperform	$91.28M	―		―	-2.48%	24.95%

The ONE Group Hospitality Corporate Events

The ONE Group Hospitality Elects New Directors at Meeting

At the 2025 Annual Meeting of Stockholders held on May 20, 2025, The ONE Group Hospitality, Inc. successfully passed all proposals presented. Emanuel Hilario, Scott Ross, and Jonathan Segal were elected as Class III directors for a three-year term. Deloitte & Touche, LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 28, 2025. Additionally, the compensation of the company’s named executive officers was approved on an advisory basis.

The most recent analyst rating on (STKS) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on The ONE Group Hospitality stock, see the STKS Stock Forecast page.