MTY Food Group (MTY) AI Stock Analysis

• Market Cap: C$911.83M
• Dividend Yield: 3.51%
• Average Volume (3M): 77.28K
• Price to Earnings (P/E): 7.3
• Beta (1Y): 1.03
• Revenue Growth: 1.38%
• EPS Growth: -64.10%
• Country: CA
• Employees: 7,632
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 1.88
• Shares Outstanding: 22,841,360
• 10 Day Avg. Volume: 39,967
• 30 Day Avg. Volume: 77,280
• PEG Ratio: 0.02
• Price to Book (P/B): 1.01
• Price to Sales (P/S): 0.73
• P/FCF Ratio: 5.11
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$46.80
• Price Target Upside: 17.23% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): 4.29
• Revenue Forecast (FY): C$1.16B

• Rating: 72 Outperform
• Price Target: C$49.00 ▲(22.75% Upside)
• Action: Upgraded Date: 02/21/26
• Date: Action: Upgraded 02/21/26

The score is driven mainly by solid operating/cash-flow fundamentals but constrained by elevated leverage and earnings volatility. Technicals are supportive with price above major moving averages and positive momentum indicators, while valuation looks attractive on a low P/E and ~3.1% yield. The latest earnings call was mixed, with development and operational initiatives progressing but same-store sales and a net income decline remaining key risks.

Positive Factors

Diversified franchise scale

Material top-line expansion over the 2020–2025 period reflects successful roll-up strategy and a diversified brand portfolio. Scale across multiple cuisines and channels improves negotiating power with suppliers, spreads fixed costs, and provides resilience versus single-brand downturns, supporting durable margin and growth capacity.

Consistent free cash flow

Reliable and growing free cash flow that tracks closely with net income demonstrates earnings quality and internal funding capacity. Sustained FCF supports reinvestment into development, dividend increases, and debt servicing without relying exclusively on external financing, strengthening long-term financial flexibility.

Asset-light franchise model & pipeline

An asset-light franchising model combined with an active development pipeline enables low-capex expansion and rapid scale. Growth through franchise openings transfers capital burden to partners, preserving corporate cash, accelerating brand penetration, and allowing management to prioritize systems and margin improvements over heavy store capex.

Negative Factors

Elevated leverage

High leverage increases financial risk over the medium term, reducing flexibility to absorb demand shocks or fund opportunistic investments. With debt rising versus prior years, interest and maturity pressures could force prioritization of deleveraging over growth, constraining strategic options during economic stress.

Weak OCF coverage of debt

Low operating-cash-flow-to-debt coverage implies limited capacity to service outstanding liabilities from recurring operations. This magnifies refinancing and rate-risk exposure and could pressure credit metrics, making sustained investment in brand development or acquisitions more conditional on improving operating cash conversion.

Earnings volatility & impairments

Intermittent profit compression and impairment charges point to volatility from integration, mix shifts or underperforming concepts. Such variability undermines predictability of returns, complicates capital allocation, and can erode investor and lender confidence if recurring, pressuring long-term return on equity and strategic execution.

MTY Food Group Business Overview & Revenue Model

Company Description

MTY Food Group Inc. franchises and operates quick-service, fast-casual, and casual dining restaurants in Canada, the United States, and internationally. The company also sells retail products under a multitude of banners. As of November 30, 2021, the company had 6,719 locations comprising 6,603 franchised, 23 joint ventures, and 93 corporate locations. The company was formerly known as iNsu Innovations Group Inc. and changed its name to MTY Food Group Inc. in July 2003. MTY Food Group Inc. was founded in 1979 and is headquartered in Saint-Laurent, Canada.

How the Company Makes Money

MTY Food Group generates revenue primarily through its franchising model, which involves charging franchisees fees for the right to operate under its various brand names. This includes initial franchise fees, ongoing royalties based on sales, and contributions to marketing funds. Additionally, MTY earns income from the sale of food and beverage products to its franchisees, as well as from corporate-owned outlets. Significant partnerships with suppliers and distributors also enhance its revenue streams, allowing for cost efficiencies and better negotiation power. The company's strategic acquisitions of established brands enable it to expand its market presence and diversify its revenue, contributing to its overall financial performance.

MTY Food Group Financial Statement Overview

Summary

Strong scale growth and generally healthy profitability, supported by consistently positive free cash flow with good alignment to earnings. Offsetting this is meaningful and rising leverage (elevated debt-to-equity; operating cash flow covers less than half of total debt) and uneven earnings consistency (notably the 2024 profit compression).

Income Statement

Revenue has expanded materially over the period (from ~$511M in 2020 to ~$1.19B in 2025 annual), indicating solid scale growth, although 2024 saw a slight dip before re-accelerating in 2025. Profitability is generally healthy with 2025 net margin near 10% and strong EBIT/EBITDA margins, but results have been volatile (notably the 2020 loss and the sharp net income compression in 2024 despite stable revenue), and gross margin has trended down versus 2021 levels—suggesting higher costs, mix shift, or integration pressures.

Balance Sheet

The balance sheet shows meaningful leverage: debt-to-equity is elevated and has moved higher into 2025 (about 1.78x), with total debt rising versus prior years. Equity has grown, but leverage remains a constraint and increases financial risk if operating performance softens. Return on equity has been positive in most years (negative in 2020), but consistency is impacted by earnings volatility.

Cash Flow

Cash generation is a clear strength: free cash flow is consistently positive each year and grew strongly in 2025 (annual free cash flow growth ~3.6x). Free cash flow is also well-aligned with earnings (free cash flow running at ~0.83–0.96x of net income across most years, including ~0.93x in 2025), supporting earnings quality. A key weakness is that operating cash flow covers less than half of total debt (roughly ~0.33–0.47x historically; ~0.45x in 2025), which reinforces the higher-leverage risk profile.

Breakdown	Nov 2025	Nov 2024	Nov 2023	Nov 2022	Nov 2021
Income Statement
Total Revenue	1.19B	1.16B	1.17B	716.52M	551.90M
Gross Profit	355.67M	419.18M	340.98M	255.40M	300.62M
EBITDA	289.69M	165.34M	263.02M	165.60M	169.80M
Net Income	118.99M	24.17M	104.08M	74.82M	85.64M
Balance Sheet
Total Assets	2.51B	2.59B	2.68B	2.33B	1.90B
Cash, Cash Equivalents and Short-Term Investments	51.99M	50.41M	58.90M	59.48M	61.23M
Total Debt	1.52B	1.22B	1.30B	1.08B	834.28M
Total Liabilities	1.65B	1.78B	1.87B	1.60B	1.26B
Stockholders Equity	856.42M	801.84M	811.41M	723.41M	647.64M
Cash Flow
Free Cash Flow	169.47M	177.08M	152.42M	130.14M	132.54M
Operating Cash Flow	182.98M	204.81M	184.59M	142.80M	139.30M
Investing Cash Flow	-7.82M	-23.54M	-319.66M	-258.42M	7.20M
Financing Cash Flow	-173.67M	-186.78M	135.94M	105.30M	-129.58M

MTY Food Group Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 39.92
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MTY, the sentiment is Neutral. The current price of 39.92 is below the 20-day moving average (MA) of 42.23, below the 50-day MA of 40.72, and above the 200-day MA of 38.64, indicating a neutral trend. The MACD of -0.07 indicates Positive momentum. The RSI at 40.25 is Neutral, neither overbought nor oversold. The STOCH value of 6.02 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:MTY.

MTY Food Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QSP.UN	73 Outperform	C$44.95B	50.42	25.66%	3.58%	19.92%	-18.34%
PZA	73 Outperform	C$550.00M	16.65	10.19%	5.98%	1.35%	-1.11%
MTY	72 Outperform	C$911.83M	7.28	3.64%	3.51%	1.38%	-64.10%
AW	62 Neutral	C$903.28M	13.37	57.97%	5.07%	-2.54%	-10.57%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
FOOD	49 Neutral	C$23.58M	-2.15	―	―	-20.91%	-109.64%

MTY Food Group Corporate Events

MTY Food Group posts stronger Q4 on gift card breakage and cash flow gains

MTY Food Group reported a sharp rebound in fourth-quarter fiscal 2025 results, with segment profits and normalized adjusted EBITDA up 48%, largely driven by a one-time catch-up of gift card breakage income on unused cards. Net income swung to $32.1 million, or $1.40 per diluted share, from a loss a year earlier, while free cash flow net of lease payments rose 38% and long-term debt was further reduced.

The group added 19 net locations in the quarter, ending the year with a marginally larger network of 7,080 stores and modest 3% system sales growth helped by a 53rd trading week, though same-store sales slipped 1.7%. Management highlighted stable performance in Canada, softer trends in the U.S., and emphasized that MTY’s diversified, asset-light franchise model continues to generate strong cash flow, supporting deleveraging and future brand investment despite a challenging macroeconomic backdrop.

The most recent analyst rating on (TSE:MTY) stock is a Hold with a C$45.00 price target. To see the full list of analyst forecasts on MTY Food Group stock, see the TSE:MTY Stock Forecast page.

MTY Food Group to Review 2025 Results in February 19 Conference Call

MTY Food Group Inc. will release its fourth-quarter and full-year 2025 financial results on February 19, 2026, and will host a conference call and webcast that morning for analysts, investors and other interested parties. The event will give stakeholders an opportunity to hear management’s commentary on the company’s annual performance and outlook, providing additional insight into MTY’s operational trends and strategic positioning in the competitive restaurant sector.

The most recent analyst rating on (TSE:MTY) stock is a Hold with a C$37.00 price target. To see the full list of analyst forecasts on MTY Food Group stock, see the TSE:MTY Stock Forecast page.

MTY Food Group Raises Quarterly Dividend by 12%

MTY Food Group Inc. has announced a 12% increase in its quarterly dividend, raising the payout from 33.0¢ to 37.0¢ per share, payable on February 13, 2026 to shareholders of record as of February 3, 2026. Management framed the higher dividend as evidence of the board’s confidence in MTY’s ability to generate sustainable cash flow and create long-term shareholder value, highlighting a disciplined capital allocation strategy that balances returning cash to investors with reinvesting for growth; this marks the company’s 13th dividend increase since initiating a quarterly dividend in 2010, reinforcing its track record of progressive shareholder returns.

The most recent analyst rating on (TSE:MTY) stock is a Hold with a C$37.00 price target. To see the full list of analyst forecasts on MTY Food Group stock, see the TSE:MTY Stock Forecast page.