Company Overview
Nathan's Famous, Inc. operates within the foodservice industry, serving customers across the United States and internationally through a diversified business model that encompasses branded product programs, product licensing, and direct restaurant operations. The company manages its portfolio of franchises and owned locations under the "Nat" brand umbrella, generating revenue through both direct sales and licensing agreements. As a listed entity in the Consumer Cyclical sector specifically within the Restaurants industry, its performance is closely tied to discretionary consumer spending patterns and dining-out trends. The firm holds a market capitalization of $412.22M and reported trailing twelve-month revenue of $157.78M, supported by a workforce of 131 employees. These financial metrics indicate a mid-cap company with a specialized operational footprint, suggesting a position that relies on brand equity and operational efficiency rather than massive scale compared to national restaurant chains. The valuation and revenue figures reflect a business that maintains a distinct niche in the competitive quick-service dining landscape while balancing the complexities of franchising and proprietary restaurant management.
Financial Health
Nathan's Famous, Inc. reported trailing twelve-month revenue of $157.78M, net income of $21.45M, and EBITDA of $32.71M, highlighting a significant gap between top-line earnings and bottom-line profit. This disparity reveals a cost structure where operating expenses, including cost of goods sold, labor, and overhead, consume a substantial portion of the revenue before reaching the net income line. The company generated free cash flow of $19.22M, which provides a critical buffer for financial flexibility, allowing management to fund capital expenditures, repay debt, or pursue strategic acquisitions without immediate reliance on external financing. Profitability is supported by a gross margin of 30.6%, an operating margin of 14.9%, and a profit margin of 13.6%, indicating that the business retains a healthy portion of sales revenue after accounting for direct costs and operating expenses. The balance sheet shows cash holdings of $24.55M against total debt of $52.98M, while the debt-to-equity ratio is listed as N/A, suggesting the capital structure is managed carefully despite the higher absolute debt figure relative to cash. Liquidity is robust, evidenced by a current ratio of 2.73, which indicates the company holds more than double the current assets necessary to cover its short-term liabilities. Return on Equity is listed as N/A, whereas Return on Assets stands at 39.9%, a metric that reveals how efficiently the company utilizes its asset base to generate earnings relative to the total assets employed.
Valuation Assessment
The stock trades with a trailing P/E ratio of 19.36, while the forward P/E is listed as N/A, implying that market expectations regarding future earnings trajectory are either not yet priced in or not applicable for standard forward modeling based on current data availability. The price-to-book ratio is reported at -27.00, a figure that indicates the market valuation is significantly detached from the book value of equity, often seen in capital-intensive or loss-making segments, though here it reflects the specific accounting composition of the firm. Alternative valuation metrics include a price-to-sales ratio of 2.61 and an EV/EBITDA of 13.47, which suggest the market is willing to pay a moderate premium for revenue and cash-flow generation relative to sales and earnings before interest, taxes, depreciation, and amortization. The stock has traded between a 52-week high of $118.50 and a 52-week low of $88.00, positioning the current price somewhere within this historical range and reflecting recent market volatility. The beta of 0.32 indicates that the stock exhibits low price volatility relative to the broader market, moving less than one-third as much as the overall index on average during periods of market fluctuation.
Growth & Income
Revenue growth for the trailing twelve months stands at 8.9%, while earnings growth is -31.7%, demonstrating that earnings are growing significantly slower than revenue, which implies a contraction in profitability or a one-time charge impacting the bottom line despite top-line expansion. The company offers a dividend yield of 2.0% with a payout ratio of 38.5%, indicating that the dividend is funded from earnings to a degree that is generally sustainable but requires careful monitoring given the recent decline in earnings growth. The high payout ratio relative to the negative earnings growth rate suggests a need for vigilance in maintaining dividend coverage as the company navigates periods of reduced profitability. Overall, the growth and income profile presents a scenario where revenue expansion is occurring, but earnings stability is currently challenged, with income support provided primarily through a consistent dividend policy rather than rapid share price appreciation or aggressive reinvestment for explosive growth.