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MTY Food Group (TSE:MTY)
TSX:MTY
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MTY Food Group
(TSX:MTY)
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Rating:68Neutral
Price Target:
C$39.00
▼(-3.01% Downside)
MTY Food Group's overall stock score reflects strong financial performance with robust revenue and cash flow growth. However, high leverage and moderate profitability metrics pose risks. The technical indicators suggest a bearish trend, and the valuation appears stretched. The earnings call highlighted both opportunities and challenges, contributing to a mixed outlook.
Positive Factors
Revenue Growth
MTY Food Group's consistent revenue growth indicates strong sales performance and market demand, supporting long-term business expansion.
Cash Flow Generation
Robust cash flow generation enhances liquidity and provides financial flexibility for strategic investments and debt management.
Digital Sales Growth
Growth in digital sales reflects successful adaptation to consumer trends, enhancing MTY's competitive edge in the evolving restaurant industry.
Negative Factors
High Leverage
High leverage can limit financial flexibility and increase risk, potentially impacting MTY's ability to invest in growth or weather downturns.
Same-Store Sales Challenges
Flat same-store sales indicate challenges in maintaining customer traffic and sales growth, which could pressure future revenue streams.
Net Income Decline
A decline in net income reduces profitability and may hinder MTY's ability to reinvest in business operations or return value to shareholders.
MTY Food Group (MTY) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$917.99M
Dividend Yield3.51%
Average Volume (3M)77.28K
Price to Earnings (P/E)28.1
Beta (1Y)1.13
Revenue Growth1.38%
EPS Growth-64.10%
CountryCA
Employees7,632
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)1.19
Shares Outstanding22,841,360
10 Day Avg. Volume39,967
30 Day Avg. Volume77,280
Financial Highlights & Ratios
PEG Ratio-0.62
Price to Book (P/B)1.43
Price to Sales (P/S)0.99
P/FCF Ratio6.45
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$42.55Price Target Upside5.82% Upside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
MTY Food Group Business Overview & Revenue Model
Company DescriptionMTY 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 MoneyMTY 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 Earnings Call Summary
Earnings Call Date:Oct 10, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 12, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While MTY Food Group reported a net gain in store locations and progress in digital and ERP initiatives, challenges in same-store sales and the performance of Papa Murphy's were concerning. The decline in net income and increased operating expenses added to the challenges, although growth in the Food Processing, Distribution, and Retail segment provided some positive momentum.Q3-2025 Updates
Positive Updates
Net Gain in Store Locations
MTY Food Group achieved a net gain of 15 locations during the third quarter, supported by a robust pipeline of new locations and continued interest from franchise partners.
Digital Sales Growth
Digital sales grew by 1% in Q3, now representing 19% of total sales, with a 3% increase excluding Papa Murphy's and foreign exchange impacts.
ERP Implementation Progress
Significant progress was made on the ERP implementation, with the Canadian go-live completed on time and on budget, and the first phase of the U.S. rollout underway.
Food Processing, Distribution, and Retail Segment Growth
Revenue growth of 19% in the Food Processing, Distribution, and Retail segment, driven by a shift to a vendor-on-record model and successful promotional activities.
Negative Updates
Same-Store Sales Challenges
Same-store sales in Canada were flat, with a 2.5% decline in mall-based locations, and U.S. markets experiencing continued volatility.
Papa Murphy's Performance Issues
Papa Murphy's system sales declined, impacting digital sales growth. Strategic closures of underperforming locations were necessary.
Net Income Decline
Net income attributable to owners dropped to $27.9 million from $34.9 million, mainly due to a $6.2 million net impairment charge on intangible costs.
Operating Expense Increases
Operating costs in Canada increased by $1.4 million, and higher costs were noted in corporate stores, although U.S. operating expenses decreased by 4%.
Company Guidance
During the MTY Food Group's 2025 Third Quarter Results Earnings Call, the company provided several key metrics and guidance. MTY achieved a net gain of 15 new locations in the third quarter, contributing to stable system sales of $1.5 billion. Same-store sales showed sequential improvement in the U.S., driven by brands like Cold Stone Creamery and SweetFrog, although Canadian same-store sales remained largely flat, with a 2.5% decline in mall-based locations. Digital sales grew by 1% in Q3, representing 19% of total sales, with a 3% increase excluding the impact of Papa Murphy's and foreign exchange. The company reported a normalized adjusted EBITDA of $74 million, up 3% year-over-year, aided by a $5.8 million employee retention credit from the U.S. government. MTY ended the quarter with net debt of approximately $602 million and a debt-to-EBITDA ratio of 2.3x, providing flexibility for potential acquisitions. Looking ahead, MTY aims to drive efficiency, accelerate store development, and leverage its asset-light model to capture long-term growth opportunities.MTY Food Group Financial Statement Overview
Summary
MTY Food Group shows strong revenue growth and cash flow generation, with a TTM revenue growth rate of 9.7% and substantial free cash flow growth of 89.7%. However, high leverage with a debt-to-equity ratio of 1.47 and moderate profitability metrics such as a net profit margin of 3.3% suggest potential risks.Income Statement
MTY Food Group's income statement shows a positive trajectory with a TTM revenue growth rate of 9.7%, indicating strong sales performance. The gross profit margin is stable at 29.9%, though slightly lower than previous periods. Net profit margin improved to 3.3% in TTM, reflecting better cost management. However, the EBIT and EBITDA margins have decreased compared to prior years, suggesting potential pressure on operational efficiency.Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 1.47, indicating significant leverage, which could pose financial risks. Return on equity is modest at 4.8%, showing limited profitability from shareholders' investments. The equity ratio is not explicitly calculated, but the company's leverage suggests a need for cautious financial management.Cash Flow
Cash flow analysis is strong, with a substantial free cash flow growth rate of 89.7% in TTM, highlighting robust cash generation capabilities. The operating cash flow to net income ratio of 0.48 and free cash flow to net income ratio of 0.89 indicate efficient cash conversion, supporting the company's liquidity position.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.17B | 1.16B | 1.17B | 716.52M | 551.90M | 511.12M |
| Gross Profit | 290.13M | 419.18M | 340.98M | 255.40M | 300.62M | 276.61M |
| EBITDA | 174.25M | 165.34M | 263.02M | 165.60M | 169.80M | 14.65M |
| Net Income | 31.61M | 24.17M | 104.08M | 74.82M | 85.64M | -36.90M |
Balance Sheet | ||||||
| Total Assets | 2.48B | 2.59B | 2.68B | 2.33B | 1.90B | 2.01B |
| Cash, Cash Equivalents and Short-Term Investments | 37.15M | 50.41M | 58.90M | 59.48M | 61.23M | 44.30M |
| Total Debt | 1.13B | 1.22B | 1.30B | 1.08B | 834.28M | 1.02B |
| Total Liabilities | 1.67B | 1.78B | 1.87B | 1.60B | 1.26B | 1.43B |
| Stockholders Equity | 812.98M | 801.84M | 811.41M | 723.41M | 647.64M | 581.75M |
Cash Flow | ||||||
| Free Cash Flow | 163.63M | 177.08M | 152.42M | 130.14M | 132.54M | 128.03M |
| Operating Cash Flow | 181.69M | 204.81M | 184.59M | 142.80M | 139.30M | 133.65M |
| Investing Cash Flow | -12.79M | -23.54M | -319.66M | -258.42M | 7.20M | -12.11M |
| Financing Cash Flow | -181.41M | -186.78M | 135.94M | 105.30M | -129.58M | -126.37M |
MTY Food Group Technical Analysis
Positive
40.21
Price Trends
36.88
Positive
37.01
Positive
38.74
Positive
Market Momentum
0.80
Negative
70.44
Negative
90.70
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MTY, the sentiment is Positive. The current price of 40.21 is above the 20-day moving average (MA) of 38.43, above the 50-day MA of 36.88, and above the 200-day MA of 38.74, indicating a bullish trend. The MACD of 0.80 indicates Negative momentum. The RSI at 70.44 is Negative, neither overbought nor oversold. The STOCH value of 90.70 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:MTY.
MTY Food Group Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | C$42.69B | 23.93 | 25.66% | 3.58% | 19.92% | -18.34% | |
73 Outperform | C$537.99M | 17.17 | 10.19% | 5.98% | 1.35% | -1.11% | |
68 Neutral | C$917.99M | 28.14 | 3.64% | 3.51% | 1.38% | -64.10% | |
62 Neutral | C$921.63M | 32.69 | 57.97% | 5.07% | -2.54% | -10.57% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
46 Neutral | C$33.78M | -3.58 | ― | ― | -20.91% | -109.64% |
* Consumer Cyclical Sector Average
TSE:MTY
MTY Food Group
40.21
-2.37
-5.57%
TSE:PZA
Pizza Pizza Royalty
15.95
3.88
32.16%
TSE:QSP.UN
Restaurant BrndLP
97.57
13.61
16.21%
TSE:AEG
Aegis Brands
0.33
-0.05
-14.47%
TSE:FOOD
Goodfood Market Corp
0.34
-0.09
-20.93%
TSE:AW
A & W Food Services of Canada Inc.
38.31
6.15
19.12%
MTY Food Group Corporate Events
Business Operations and Strategy
MTY Food Group Initiates Strategic Review to Enhance Shareholder Value
Neutral
Nov 17, 2025
MTY Food Group has announced that its Board of Directors is conducting a strategic review process with the help of a financial advisor to explore potential strategic alternatives aimed at enhancing shareholder value. This review could include the sale of part or all of the company or continuing with its current business plan, although there is no certainty of any transaction taking place. The announcement reflects MTY’s proactive approach to maintaining its competitive position in the restaurant industry and addressing shareholder interests.
The most recent analyst rating on (TSE:MTY) stock is a Hold with a C$50.00 price target. To see the full list of analyst forecasts on MTY Food Group stock, see the TSE:MTY Stock Forecast page.
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.