Company Overview
GEN Restaurant Group, Inc. operates a portfolio of restaurants across the United States, specializing in the provision of meats, poultry, and seafood to its locations. The company functions within the Consumer Cyclical sector, specifically targeting the Restaurants industry, which implies its performance is sensitive to discretionary consumer spending and macroeconomic conditions. With a market capitalization of $62.59M and a reported revenue of $217.45M, the entity manages a workforce consisting of 289 employees. These valuation and revenue figures indicate that the company operates on a small-cap scale, suggesting it holds a niche position in the broader restaurant landscape rather than dominating the entire market.
Financial Health
The company reported a total revenue of $217.45M for the trailing twelve months, yet this generated a net income of $-1,331,000 and an EBITDA of $-1,167,000. The substantial gap between the $217.45M in revenue and the negative net income reveals a cost structure where operating expenses, likely including labor and food costs, significantly erade gross profits before reaching the bottom line. Free cash flow stands at $-15,192,500, indicating a significant outflow of cash that limits the company's immediate financial flexibility and ability to fund operations without external capital. Gross margin is calculated at 15.5%, which is a standard but not exceptional figure for the restaurant industry, indicating that the company retains a moderate portion of sales after direct costs. Operating margin sits at -8.4%, while profit margin is -0.6%, both negative figures that highlight the company's current inability to generate operating or net profits from its core business activities. The balance sheet shows a cash position of $4.79M against total debt of $175.54M, resulting in a debt-to-equity ratio of 460.89, which characterizes the company as highly leveraged rather than conservative. Furthermore, the current ratio of 0.33 indicates that current assets are only about one-third of current liabilities, signaling potential short-term liquidity constraints. Return on Equity is -20.5% and Return on Assets is -2.5%, metrics that reveal management is currently destroying value relative to the capital invested by shareholders and the total asset base.
Valuation Assessment
The P/E Ratio (TTM) is listed as N/A due to the lack of positive earnings, while the Forward P/E is -18.10, a negative multiple that suggests the market is pricing in future profitability expectations despite current losses. The Price to Book ratio is 0.72, indicating that the stock is trading at a discount to its book value, though this does not necessarily reflect intrinsic value given the negative earnings. The Price to Sales ratio is 0.29, and the EV/EBITDA stands at -175.59, both alternative metrics that highlight the significant valuation gap created by the company's negative earnings and high debt load. The 52-Week High is $6.19 and the 52-Week Low is $1.50, placing the current trading price within a range of $4.69, which represents a position between the extremes of recent volatility. The Beta is 1.47, meaning the stock's price volatility is expected to be 47% higher than the broader market, reflecting the inherent risks associated with small-cap restaurant stocks.
Growth & Income
Revenue growth year-over-year is 2.7%, whereas earnings growth is N/A, implying that while top-line sales are expanding slightly, profitability remains stagnant or undefined due to the net loss. As a non-dividend payer with a dividend yield of N/A and a payout ratio of 0.0%, the company does not distribute cash to shareholders, suggesting that any retained earnings are theoretically available for reinvestment but are currently consumed by operational losses. This structure indicates a focus on survival and potential future expansion rather than immediate income generation for investors. The overall growth and income profile reflects a high-risk environment where modest revenue expansion has yet to translate into positive earnings or shareholder returns.