Company Overview
FAT Brands Inc. operates as a multi-brand restaurant franchising entity that acquires, develops, markets, and manages quick service, fast casual, casual dining, and polished casual dining restaurant concepts across the United States, Canada, and international markets. The company specifically owns restaurant brands such as Round Table Pizza and functions within the Consumer Cyclical sector, specifically the Restaurants industry, where performance is directly tied to consumer discretionary spending patterns. This organization employs a workforce of 2,089 individuals to support its extensive portfolio of locations and operational capabilities. With a market capitalization of $3.02M and reported trailing twelve-month revenue of $574.14M, the company presents a distinct profile in the public markets. The relatively small market cap of $3.02M combined with substantial annual revenue of $574.14M suggests a significant disconnect between the company's operational scale and its current equity valuation, indicating that the broader market is pricing the stock based on severe concerns regarding its financial trajectory rather than its current revenue generation capabilities.
Financial Health
The company reported total revenue of $574.14M over the trailing twelve months, yet this revenue base was associated with a net income loss of $234,694,000 and an EBITDA figure of -$12,452,000. The substantial gap between the positive revenue of $574.14M and the significant net income loss of $234,694,000 reveals a highly aggressive cost structure where operating expenses and interest obligations are consuming the majority of top-line earnings before taxes. Despite the negative earnings, the company reported positive free cash flow of $37.84M, which indicates a degree of financial flexibility allowing for potential capital return or operational reinvestment despite the accounting losses. This positive free cash flow stands in stark contrast to the negative EBITDA, highlighting that non-cash charges or specific accounting adjustments are driving the reported net loss rather than a complete lack of cash generation from operations. The company maintains a gross margin of 24.7%, which indicates healthy pricing power and cost control on the cost of goods sold, yet this is offset by an operating margin of -11.4% and a profit margin of -39.3%, demonstrating that overhead costs and other expenses are severely eroding profitability. On the balance sheet, the company holds cash of $2.05M against total debt of $1.57B, creating a highly leveraged position where debt obligations vastly exceed available liquid assets. The debt-to-equity ratio is listed as N/A due to the specific financial constraints reflected in the price-to-book ratio of -0.00, further emphasizing the distressed nature of the equity structure. Liquidity is critically constrained with a current ratio of 0.03, which indicates that the company's current assets are insufficient to cover its current liabilities without external financing or asset liquidation. Return on Equity is listed as N/A, while the return on assets stands at -2.4%, revealing that the company's asset base is generating negative returns for shareholders.
Valuation Assessment
The trailing twelve-month P/E ratio is listed as N/A due to the absence of earnings, while the forward P/E is reported at -0.03, implying that the market is not currently valuing the stock based on earnings multiples. The price-to-book ratio is listed as -0.00, which indicates that the market is pricing the company's equity at a level below its book value, suggesting a market discount that often accompanies distressed assets or severe profitability challenges. Alternative valuation metrics further highlight the precarious position, with a price-to-sales ratio of 0.01 and an EV/EBITDA of -128.82, suggesting that the market is pricing the company at a negligible fraction of its sales despite the massive revenue base. The stock has experienced extreme volatility, with a 52-week high of $3.98 and a 52-week low of $0.06. Given the current market cap of $3.02M and the historical range, the stock is trading at a level significantly below the 52-week high, reflecting a dramatic decline in market sentiment over the past year. The beta value of 1.22 indicates that the stock's price volatility is 22% higher than the broader market, making it a high-risk investment that is more sensitive to market downturns than the general index.
Growth & Income
Revenue growth year-over-year is -2.3%, while earnings growth is listed as N/A due to the recent losses, indicating that the company is currently contracting in terms of top-line sales rather than expanding. The lack of positive earnings growth combined with negative revenue growth suggests that the company is unable to generate profit from its existing or new operations, which is a primary driver for the negative valuation multiples observed. The company reports a dividend yield of 41.2%, but the payout ratio is 0.0%, indicating that the company is not currently distributing any earnings to shareholders. This discrepancy between the high dividend yield and the zero payout ratio suggests that the dividend is likely unsustainable or is being funded through non-operating sources, given the net income loss of $234,694,000. The overall growth and income profile is characterized by revenue contraction, negative profitability, and a dividend structure that does not align with current earnings generation capabilities.