MTY Food Group (MTY) AI Stock Analysis

• Market Cap: $922.14M
• Dividend Yield: 4.5%
• Average Volume (3M): 40.98K
• Price to Earnings (P/E): 132.2
• Beta (1Y): 0.92
• Revenue Growth: 0.33%
• EPS Growth: -92.77%
• Country: CA
• Employees: 7,632
• Sector: Consumer Cyclical
• Sector Strength: 56
• Industry: Restaurants
• EPS (TTM): 0.87
• Shares Outstanding: 22,847,860
• 10 Day Avg. Volume: 52,992
• 30 Day Avg. Volume: 40,982
• PEG Ratio: -1.69
• Price to Book (P/B): 2.07
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 11.50
• 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: $48.67
• Price Target Upside: 17.96% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 65 Neutral
• Price Target: C$45.00 ▲(9.06%Upside)

MTY Food Group's overall stock score reflects solid financial health and resilience highlighted in the earnings call, despite valuation concerns and technical indicators suggesting caution. The company's strong cash flow and strategic initiatives provide a foundation for potential growth, but challenges in revenue growth and thin margins require attention.

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 makes money primarily through franchising, generating revenue from franchise fees, royalties, and marketing fees paid by franchisees. The company also earns income from company-owned locations, though a smaller portion of its overall revenue. Key revenue streams include initial franchise fees, ongoing royalties based on a percentage of franchisee sales, and contributions to marketing funds. MTY benefits from economies of scale and a diverse brand portfolio, allowing it to leverage its extensive network and industry expertise. Significant partnerships with suppliers and strategic acquisitions of complementary brands also contribute to its financial performance.

MTY Food Group Financial Statement Overview

Summary

MTY Food Group exhibits solid financial health with strong cash flows and operational efficiency. However, the company faces challenges in revenue growth and thin net margins. The balance sheet shows manageable leverage, but profitability metrics indicate room for improvement.

Income Statement

MTY Food Group demonstrates a strong gross profit margin of 36.7% and a net profit margin of 0.74% for TTM (Trailing-Twelve-Months), indicating operational efficiency but thin profitability. EBIT margin at 26.3% shows robust core earnings capability. However, revenue growth has been modest, with a slight increase in TTM compared to previous annual reports, suggesting limited top-line expansion.

Balance Sheet

The company's debt-to-equity ratio of 1.49 indicates a moderate level of leverage, which is common in the restaurant industry but could pose risks if not managed well. Return on equity is relatively low at 1.05% for TTM, reflecting limited profitability. However, the equity ratio of 31.2% suggests a stable capital structure, providing some financial stability.

Cash Flow

MTY Food Group's cash flow performance is robust with a high operating cash flow to net income ratio of 24.34 for TTM, indicating strong cash generation relative to net earnings. Free cash flow growth has been consistent, reinforcing financial flexibility. However, the free cash flow to net income ratio of 21.48 suggests strong cash conversion, supporting strategic investments and debt servicing.

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	427.90M	419.18M	340.98M	255.40M	300.62M	276.61M
EBITDA	150.15M	165.34M	263.02M	165.60M	169.80M	14.65M
Net Income	8.61M	24.17M	104.08M	74.82M	85.64M	-36.90M
Balance Sheet
Total Assets	2.62B	2.59B	2.68B	2.33B	1.90B	2.01B
Cash, Cash Equivalents and Short-Term Investments	68.78M	50.41M	58.90M	59.48M	61.23M	44.30M
Total Debt	1.22B	1.22B	1.30B	1.08B	834.28M	1.02B
Total Liabilities	1.80B	1.78B	1.87B	1.60B	1.26B	1.43B
Stockholders Equity	816.90M	801.84M	811.41M	723.41M	647.64M	581.75M
Cash Flow
Free Cash Flow	184.82M	177.08M	152.42M	130.14M	132.54M	128.03M
Operating Cash Flow	209.43M	204.81M	184.59M	142.80M	139.30M	133.65M
Investing Cash Flow	-20.02M	-23.54M	-319.66M	-258.42M	7.20M	-12.11M
Financing Cash Flow	-173.07M	-186.78M	135.94M	105.30M	-129.58M	-126.37M

MTY Food Group Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 41.26
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 41.26 is above the 20-day moving average (MA) of 41.04, below the 50-day MA of 42.26, and below the 200-day MA of 44.47, indicating a neutral trend. The MACD of -0.50 indicates Negative momentum. The RSI at 49.00 is Neutral, neither overbought nor oversold. The STOCH value of 47.98 is Neutral, 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
MTY	65 Neutral	$922.14M	132.20	1.11%	4.50%	0.33%	-92.77%
Sector *	61 Neutral	C$5.16B	10.92	18.94%	4.33%	5.08%	6.52%
PZRIF		$365.60M	16.12	10.29%	6.22%	―	―
ODD	38 Underperform	C$17.23M	―		―	-6.91%	31.42%
AEG		C$32.41M	―	6.54%	―	―	―
JIVA		C$86.64K	―		―	―	―
FOOD	44 Neutral	C$13.85M	―	11.42%	―	-13.66%	-25.60%

MTY Food Group Corporate Events

MTY Food Group Announces 2025 AGM Results

MTY Food Group Inc. held its 2025 Annual General Meeting, where shareholders voted on several key issues. All director nominees were elected, and PricewaterhouseCoopers was reappointed as auditor. Shareholders approved the executive compensation approach but rejected proposals for an independent board chair, a food waste transparency report, and a roadmap for switching to cage-free eggs, indicating a preference for the current management and operational strategies.

MTY Food Group Shows Resilience with Q1 2025 Financial Results

MTY Food Group reported a slight increase in normalized adjusted EBITDA for the first quarter of fiscal 2025, reaching $60.2 million. Despite challenges such as adverse weather affecting its US frozen treats segment, the company maintained stable same-store sales and plans to expand its footprint in the coming quarters. The company also emphasized its strong free cash flow growth and strategic share repurchases as part of its capital management strategy.

MTY Food Group to Discuss Q1 Results in Upcoming Conference Call

MTY Food Group Inc. announced it will hold a conference call on April 11, 2025, to discuss its first-quarter results. This event is significant for analysts and investors as it provides insights into the company’s financial performance and strategic direction, potentially impacting stakeholder decisions.