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The ONE Group Hospitality Inc (STKS)
NASDAQ:STKS
Top Page
The ONE Group Hospitality
(NASDAQ:STKS)
59Neutral
Positive Factors
Future Growth Potential
Significant whitespace expansion potential exists across the brand portfolio, both domestically and internationally.
Strategic Acquisition
The May 2024 Benihana/RA Sushi acquisition is a transformational event for the ONE Group, more than doubling run rate revenue and adjusted EBITDA.
Negative Factors
Economic Environment
Economic uncertainty remains an overhang to posting solid SSS growth, with modest negative SSS expected in 1Q25.
Revenue Visibility
Top line visibility remains limited with reduced revenue guidance and lower SSS growth estimates.
The ONE Group Hospitality (STKS) vs. S&P 500 (SPY)
Market Cap
$96.18M
Dividend YieldN/A
Average Volume (3M)74.66K
Price to Earnings (P/E)―
Beta (1Y)1.29
Revenue Growth102.35%
EPS Growth-846.68%
CountryUS
Employees10,800
SectorConsumer Cyclical
Sector Strength62
IndustryRestaurants
Share Statistics
EPS (TTM)-1.12
Shares Outstanding31,026,865
10 Day Avg. Volume57,265
30 Day Avg. Volume74,657
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap8.93
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit7.00
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$4.80Price Target Upside54.84% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
The ONE Group Hospitality Business Overview & Revenue Model
Company DescriptionThe 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 MoneyThe 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 shows strong revenue growth but struggles with profitability due to negative net income and high leverage. The stable gross profit margins and positive operating cash flow are encouraging, but high debt and volatile cash flows pose risks. Improvements in net margins and debt reduction are needed for better financial stability.Income Statement
The ONE Group Hospitality shows a strong revenue growth trend, increasing from $120.7M in 2019 to $673.3M in 2024. However, the company struggles with profitability, as evidenced by the negative net income in 2024. Gross profit margins have been relatively stable, but net profit margins have fluctuated significantly, indicating challenges in controlling costs or achieving operational efficiencies.65
Positive
Balance Sheet
The company's balance sheet highlights a high debt-to-equity ratio, reflecting high leverage that could pose financial risks. Stockholders' equity has decreased over the years, which, when combined with rising liabilities, suggests financial vulnerability. However, the increase in total assets indicates potential growth opportunities.58
Neutral
Cash Flow
The cash flow statement reveals volatility, with negative free cash flow in recent years despite positive operating cash flow. The negative free cash flow is concerning as it indicates challenges in funding operations and investments without relying on external financing. Yet, operating cash flow has generally been positive, suggesting underlying operational strength.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 673.34M | 332.77M | 316.64M | 277.18M | 141.94M | Gross Profit |
| 122.75M | 65.79M | 66.58M | 65.18M | 20.88M | EBIT |
| 10.77M | 9.29M | 23.39M | 19.39M | 7.04M | EBITDA |
| 40.72M | 34.02M | 31.35M | 38.57M | 6.79M | Net Income Common Stockholders |
| -15.82M | 4.72M | 13.53M | 31.35M | -13.62M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 28.07M | 21.05M | 55.12M | 23.61M | 24.39M | Total Assets |
| 959.35M | 317.25M | 291.02M | 229.84M | 215.57M | Total Debt |
| 312.91M | 200.17M | 183.63M | 132.64M | 159.09M | Net Debt |
| 284.83M | 179.12M | 128.51M | 109.03M | 134.71M | Total Liabilities |
| 756.75M | 249.88M | 222.43M | 169.31M | 193.59M | Stockholders Equity |
| 47.16M | 69.18M | 69.71M | 61.20M | 23.18M |
| Cash Flow | Free Cash Flow | |||
| -27.37M | -22.77M | -7.38M | 19.50M | -5.36M | Operating Cash Flow |
| 44.19M | 30.78M | 25.25M | 30.97M | 431.00K | Investing Cash Flow |
| -441.39M | -53.55M | -32.63M | -11.47M | -5.79M | Financing Cash Flow |
| 404.34M | -11.25M | 39.10M | -20.27M | 17.42M |
The ONE Group Hospitality Technical Analysis
Positive
3.10
Price Trends
2.91
Positive
3.06
Positive
3.39
Negative
Market Momentum
0.04
Negative
57.96
Neutral
90.59
Negative
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 3.1 is above the 20-day moving average (MA) of 2.88, above the 50-day MA of 2.91, and below the 200-day MA of 3.39, indicating a neutral trend. The MACD of 0.04 indicates Negative momentum. The RSI at 57.96 is Neutral, neither overbought nor oversold. The STOCH value of 90.59 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STKS.
The ONE Group Hospitality Risk Analysis
The ONE Group Hospitality disclosed 29 risk factors in its most recent earnings report. The ONE Group Hospitality 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
The ONE Group Hospitality Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $45.02M | 13.63 | 5.48% | 2.04% | 8.87% | -5.22% | |
61 Neutral | $6.66B | 11.71 | 2.96% | 4.01% | 2.64% | -20.91% | |
59 Neutral | $96.18M | ― | -11.53% | ― | 102.35% | -846.68% | |
41 Neutral | $48.20M | ― | -335.60% | ― | -2.01% | -267.04% | |
38 Underperform | $76.33M | ― | ― | -2.48% | 24.95% | ||
38 Underperform | $51.28M | ― | 92.02% | ― | -4.19% | -266.52% | |
34 Underperform | $50.55M | ― | 38.50% | 19.72% | 23.35% | -101.64% |
* Consumer Cyclical Sector Average
Performance Comparison
STKS
The ONE Group Hospitality
3.10
-2.01
-39.33%
BDL
Flanigan's Enterprises
24.50
-1.65
-6.31%
RRGB
Red Robin Gourmet
2.91
-4.41
-60.25%
NDLS
Noodles & Co
1.05
-0.53
-33.54%
FAT
Fat Brands
2.84
-0.95
-25.07%
THCH
TH International
2.86
-2.69
-48.47%
The ONE Group Hospitality Earnings Call Summary
Earnings Call Date:Mar 10, 2025
(Q4-2024)
| % Change Since: 8.01%|
Next Earnings Date:May 13, 2025
Earnings Call Sentiment Positive
The earnings call reflects a transformative year marked by strategic acquisitions and record revenue growth. While there are challenges such as a decline in comparable sales and increased operating expenses, the company's successful integration of acquisitions, strong financial position, and innovative culinary and marketing strategies contribute positively to the overall outlook.Q4-2024 Updates
Positive Updates
Transformative Acquisition
The strategic acquisition of Benihana and RA Sushi expanded the portfolio of vibe dining venues, achieving scale and operational efficiencies with $20 million in targeted cost savings by 2026.
Record Revenue Growth
Full year revenue increased over 100% to $672 million, and adjusted EBITDA rose almost 130% to $75.2 million, both at the higher end of 2024 guidance ranges.
Strong Fourth Quarter Performance
Fourth quarter revenues increased by almost 150% to a record $222 million, with adjusted EBITDA also up by nearly 150% to $30.3 million.
Successful Restaurant Openings
Opened three restaurants, including two company-owned units and one managed location, ending the year with six new restaurants.
Solid Financial Position
Over $71 million in liquid resources at year end, with no drawn revolving credit facility.
Culinary and Marketing Innovations
A successful Wagyu program at Benihana and new drink menu launched. Enhanced digital engagement and local store outreach to drive traffic.
Negative Updates
Comparable Sales Decline
Consolidated comparable sales saw a reduction, with a 4.3% decline noted in the fourth quarter.
Increased Operating Expenses
Company-owned restaurant operating expenses as a percentage of net revenue increased by 340 basis points due to cost inflation.
Net Loss for the Quarter
Net loss available to common stockholders was $5.4 million or $0.18 per share, compared to a net income of $4.6 million in the prior year.
Interest Expense Increase
Interest expense rose to $10.5 million from $1.9 million in the prior year quarter due to higher outstanding debt post-acquisition.
Company Guidance
During the fourth quarter and full year 2024 earnings call, The ONE Group reported significant growth metrics and provided forward-looking guidance. The company achieved a full-year revenue increase of over 100% to $672 million and an adjusted EBITDA increase of almost 130% to $75.2 million. For the fourth quarter alone, revenue surged by nearly 150% to a record $222 million, with adjusted EBITDA rising about 150% to $30.3 million. The company aims for $20 million in total cost savings by the end of 2026, leveraging efficiencies from its acquisition of Benihana and RA Sushi. Looking ahead, The ONE Group projects 2025 revenues between $835 million and $870 million, with adjusted EBITDA ranging from $95 million to $115 million and plans to open five to seven new venues. For the first quarter of 2025, they expect revenues between $205 million and $210 million, adjusted EBITDA of $24 million to $26 million, and consolidated comparable sales improvement sequentially. The call also highlighted ongoing initiatives to drive sales through strategic pillars of operations, culinary innovation, and marketing, while maintaining a focus on cost efficiency and guest experience.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.