MTY Food Group (MTY) AI Stock Analysis

• Market Cap: $869.11M
• Dividend Yield: 3.5%
• Average Volume (3M): 90.16K
• Price to Earnings (P/E): 26.6
• Beta (1Y): 1.13
• Revenue Growth: 1.38%
• EPS Growth: -64.10%
• Country: CA
• Employees: 7,632
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 1.19
• Shares Outstanding: 22,841,360
• 10 Day Avg. Volume: 45,288
• 30 Day Avg. Volume: 90,156
• PEG Ratio: -0.62
• Price to Book (P/B): 1.43
• Price to Sales (P/S): 0.99
• P/FCF Ratio: 6.45
• Enterprise Value/Market Cap: 2.27
• Enterprise Value/Revenue: 1.69
• Enterprise Value/Gross Profit: 5.66
• Enterprise Value/Ebitda: 10.90
• 1Y Price Target: $41.99
• Price Target Upside: 11.27% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: C$39.00 ▲(3.34% Upside)

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 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

MTY Food Group shows strong revenue growth and cash flow generation, with a TTM revenue growth rate of 9.7% and a substantial free cash flow growth rate 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	348.42M	419.18M	340.98M	255.40M	300.62M	276.61M
EBITDA	180.95M	165.34M	263.02M	165.60M	169.80M	14.65M
Net Income	38.62M	24.17M	104.08M	74.82M	85.64M	-36.90M
Balance Sheet
Total Assets	2.51B	2.59B	2.68B	2.33B	1.90B	2.01B
Cash, Cash Equivalents and Short-Term Investments	47.20M	50.41M	58.90M	59.48M	61.23M	44.30M
Total Debt	1.17B	1.22B	1.30B	1.08B	834.28M	1.02B
Total Liabilities	1.72B	1.78B	1.87B	1.60B	1.26B	1.43B
Stockholders Equity	794.20M	801.84M	811.41M	723.41M	647.64M	581.75M
Cash Flow
Free Cash Flow	186.47M	177.08M	152.42M	130.14M	132.54M	128.03M
Operating Cash Flow	209.03M	204.81M	184.59M	142.80M	139.30M	133.65M
Investing Cash Flow	-20.65M	-23.54M	-319.66M	-258.42M	7.20M	-12.11M
Financing Cash Flow	-188.72M	-186.78M	135.94M	105.30M	-129.58M	-126.37M

MTY Food Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 37.74
• 50DMA: Positive
• 100DMA: Positive
• 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 Positive. The current price of 37.74 is above the 20-day moving average (MA) of 37.12, above the 50-day MA of 35.77, and below the 200-day MA of 39.08, indicating a neutral trend. The MACD of 0.75 indicates Negative momentum. The RSI at 58.63 is Neutral, neither overbought nor oversold. The STOCH value of 42.77 is Neutral, 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PZA	77 Outperform	$501.97M	16.02	10.19%	6.00%	1.35%	-1.11%
MTY	68 Neutral	$869.11M	26.64	3.64%	3.50%	1.38%	-64.10%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
FOOD	46 Neutral	C$27.54M	-3.02	―	―	-20.91%	-109.64%
ODD	41 Neutral	C$8.86M	-3.93	―	―	-2.40%	9.13%

MTY Food Group Corporate Events

MTY Food Group Initiates Strategic Review to Enhance Shareholder Value

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.

MTY Food Group Schedules Q3 Results Conference Call

MTY Food Group Inc, a company listed on the Toronto Stock Exchange under the symbol MTY, has announced a conference call to discuss its third-quarter results. The call is scheduled for October 10, 2025, and will be accessible to analysts, investors, and other interested parties. The third-quarter results will be published before the call, providing stakeholders with insights into the company’s financial performance. This announcement is significant as it offers an opportunity for stakeholders to engage with the company’s management and gain a deeper understanding of its current market position and future prospects.