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MTY Food Group
(TSX:MTY)
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Rating:65Neutral
Price Target:
C$36.00
▼(-8.84% Downside)
Action:Reiterated
Date:07/11/26
The score is driven primarily by solid underlying profitability/cash generation but constrained by leverage and recent revenue softness. Valuation is a major positive (very low P/E and strong dividend yield), while technicals are the main near-term negative with the stock trading below key moving averages and weak momentum. Earnings-call commentary is mixed: decisive portfolio optimization and growth plans are balanced by negative same-store sales and near-term earnings pressure.
Positive Factors
Consistent free cash flow generation
Material and repeatable free cash flow (TTM FCF ≈ CAD156M, operating cash flow ≈ CAD168M) provides durable internal funding for franchise expansion, capex, dividends and debt reduction. Sustained FCF supports strategic flexibility and resilience across restaurant cycles.
Negative Factors
Elevated absolute leverage on the balance sheet
Despite improvement, total debt remains sizable (~CAD1.08B) with debt/equity ≈1.28x and limited debt coverage from operating cash flow. Elevated indebtedness increases sensitivity to interest rates and operational volatility, constraining capital allocation and raising refinancing risk in adverse cycles.
Read all positive and negative factors
Positive Factors
Negative Factors
Consistent free cash flow generation
Material and repeatable free cash flow (TTM FCF ≈ CAD156M, operating cash flow ≈ CAD168M) provides durable internal funding for franchise expansion, capex, dividends and debt reduction. Sustained FCF supports strategic flexibility and resilience across restaurant cycles.
Read all positive factors
MTY Food Group (MTY) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$746.00M
Dividend Yield3.51%
Average Volume (3M)77.28K
Price to Earnings (P/E)6.8
Beta (1Y)0.86
Revenue Growth-1.60%
EPS Growth194.60%
CountryCA
Employees6,868
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)4.92
Shares Outstanding22,841,360
10 Day Avg. Volume39,967
30 Day Avg. Volume77,280
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)1.01
Price to Sales (P/S)0.73
P/FCF Ratio5.11
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$41.67Price Target Upside5.51% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)4.56
Revenue Forecast (FY)C$1.13B
MTY Food Group Business Overview & Revenue Model
Company Description
MTY Food Group Inc. is a prominent entity in the food service sector, managing an extensive portfolio of quick-service, fast-casual, and casual dining establishments. These operations span Canada, the United States, and various international terri...
How the Company Makes Money
MTY primarily makes money through a franchise-based model and, to a lesser extent, through sales at company-operated restaurants. Key revenue streams typically include: (1) Franchise royalties and fees: MTY earns ongoing royalties from franchisees...
MTY Food Group Earnings Call Summary
Earnings Call Date:Jul 10, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 09, 2026
Earnings Call Sentiment Negative
The call described a company with solid cash generation, improved leverage and a robust new-store pipeline, but facing clear near-term operational challenges: negative same-store sales, meaningful declines in EBITDA and net income, large FX and impairment headwinds, and a planned corporate-store rationalization with associated costs. Management is taking decisive actions (store closures, portfolio optimization) that should improve long-term profitability, but near-term results and certain banners (notably Papa Murphy's) remain under pressure.Positive Updates
Strong Free Cash Flow Generation
Cash flows from operations of CAD 43.0M (vs CAD 34.4M prior year) and free cash flow net of lease repayments of CAD 32.2M (vs CAD 17.8M prior year), reflecting improved cash conversion and lower interest paid.
Negative Updates
Negative Same-Store Sales
Same-store sales remained negative in Q2 with declines of 2.2% in the U.S. and 1.8% in Canada; traffic remained under pressure and was a primary driver of the declines.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Free Cash Flow Generation
Cash flows from operations of CAD 43.0M (vs CAD 34.4M prior year) and free cash flow net of lease repayments of CAD 32.2M (vs CAD 17.8M prior year), reflecting improved cash conversion and lower interest paid.
Read all positive updates
Company Guidance
The company guided that it will accelerate new-store openings in H2 2026 (Q2 net store growth was +6 locations) and expects to be net-store-positive this year if the planned 68 corporate closures are excluded; the 68 closures (about 1% of the base) will be implemented over ~6–9 months (heavier in Q3), will cost an estimated CAD 10–12 million and address >CAD 10 million of four‑wall EBITDA losses over the last 12 months, and will weigh on free cash flow in the short term. Management said franchise EBITDA (Q2 normalized franchise EBITDA CAD 50.9M, 52% margin; franchise profit CAD 50.6M on CAD 98.6M revenue) should grow faster than same‑store sales (Q2 SSS: U.S. -2.2%, Canada -1.8%; June improved in Canada), corporate margins should trend to the high‑single‑digit range (Q2 corporate adjusted EBITDA/profit CAD 5.7M, 5% margin), and overall profitability/cash generation remains a focus (Q2 normalized adjusted EBITDA CAD 60.2M, cash from operations CAD 43M, free cash flow net of lease repayments CAD 32.2M, net debt ~CAD 531M, debt/EBITDA ~1.9x). CapEx is expected to be roughly in line with last year, and digital sales remain material at CAD 284.2M (21% of sales).MTY Food Group Financial Statement Overview
Summary
Income Statement
73
Positive
Balance Sheet
58
Neutral
Cash Flow
70
Positive
| Breakdown | TTM | Nov 2025 | Nov 2024 | Nov 2023 | Nov 2022 | Nov 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.15B | 1.19B | 1.16B | 1.17B | 716.52M | 551.90M |
| Gross Profit | 275.75M | 355.67M | 419.18M | 340.98M | 255.40M | 300.62M |
| EBITDA | 269.76M | 289.69M | 165.34M | 263.02M | 165.60M | 169.80M |
| Net Income | 112.34M | 118.99M | 24.17M | 104.08M | 74.82M | 85.64M |
Balance Sheet | ||||||
| Total Assets | 2.48B | 2.51B | 2.59B | 2.68B | 2.33B | 1.90B |
| Cash, Cash Equivalents and Short-Term Investments | 62.98M | 51.99M | 50.41M | 58.90M | 59.48M | 61.23M |
| Total Debt | 1.08B | 1.52B | 1.22B | 1.30B | 1.08B | 834.28M |
| Total Liabilities | 1.60B | 1.65B | 1.78B | 1.87B | 1.60B | 1.26B |
| Stockholders Equity | 874.69M | 856.42M | 801.84M | 811.41M | 723.41M | 647.64M |
Cash Flow | ||||||
| Free Cash Flow | 156.26M | 169.47M | 177.08M | 152.42M | 130.14M | 132.54M |
| Operating Cash Flow | 167.95M | 182.98M | 204.81M | 184.59M | 142.80M | 139.30M |
| Investing Cash Flow | -684.00K | -7.82M | -23.54M | -319.66M | -258.42M | 7.20M |
| Financing Cash Flow | -154.22M | -173.67M | -186.78M | 135.94M | 105.30M | -129.58M |
MTY Food Group Technical Analysis
Negative
39.49
Price Trends
38.39
Negative
38.87
Negative
38.16
Negative
Market Momentum
-1.20
Positive
24.40
Positive
19.62
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MTY, the sentiment is Negative. The current price of 39.49 is above the 20-day moving average (MA) of 37.44, above the 50-day MA of 38.39, and above the 200-day MA of 38.16, indicating a bearish trend. The MACD of -1.20 indicates Positive momentum. The RSI at 24.40 is Positive, neither overbought nor oversold. The STOCH value of 19.62 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
65 Neutral | C$746.00M | 6.84 | 18.59% | 3.51% | -1.60% | 194.60% | |
64 Neutral | C$438.11M | 13.77 | 10.21% | 5.98% | 1.17% | -1.36% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
| ― | C$46.46B | 21.57 | 27.14% | 3.58% | 8.57% | -4.22% | |
55 Neutral | C$883.34M | 15.60 | 25.77% | 5.07% | -0.78% | 313.58% | |
44 Neutral | C$15.92M | -1.12 | 32.72% | ― | -23.24% | -51.96% |
* Consumer Cyclical Sector Average
TSE:MTY
MTY Food Group
33.63
-4.88
-12.66%
TSE:PZA
Pizza Pizza Royalty
12.81
-1.67
-11.51%
TSE:QSP.UN
Restaurant BrndLP
101.57
12.10
13.53%
TSE:AEG
Aegis Brands
0.26
-0.11
-29.73%
TSE:FOOD
Goodfood Market Corp
0.15
-0.03
-16.67%
TSE:AW
A & W Food Services of Canada Inc.
36.35
-0.20
-0.56%
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.