Company Overview
Reborn Coffee, Inc. operates and franchises a network of retail locations, kiosks, and cafes dedicated to serving specialty-roasted coffee, tea, and various food items across California, China, and Europe. As a participant in the Consumer Cyclical sector within the Restaurants industry, the company functions as a direct provider of consumable goods where consumer spending power influences demand. The enterprise holds a market capitalization of $14.34M and generated annual revenue of $6.66M over the trailing twelve months, though specific employee count data is not publicly disclosed in the provided records. These financial dimensions indicate that Reborn Coffee operates as a mid-sized entity within the broader restaurant landscape, suggesting a niche operational scale that relies heavily on franchise expansion and direct retail sales to generate its current top-line results.
Financial Health
The company reported revenue of $6.66M for the trailing twelve months, accompanied by a net income of -$12,759,933 and an EBITDA of -$10,424,483, revealing a significant divergence between gross sales and bottom-line profitability. This substantial gap between revenue and net income indicates a highly aggressive cost structure where operating expenses, likely including franchise support, supply chain logistics, and general administrative costs, heavily erode the gross profit generated from sales. Despite the negative earnings, the company generated positive free cash flow of $1.49M, which provides a degree of financial flexibility to fund operations or pay down obligations without immediate reliance on external equity financing. However, the balance sheet presents a leveraged position with total debt standing at $4.35M while cash on hand remains minimal at $44,045, creating a negative liquidity buffer. The debt-to-equity ratio is not calculable due to the lack of positive equity, yet the leverage is evident given the high debt load relative to limited liquid assets. Profitability metrics are further stressed by a gross margin of 55.5%, which is healthy for the sector, contrasted sharply by an operating margin of -224.7% and a profit margin of -191.5%, signaling that overhead costs exceed gross profits by a wide margin. Liquidity is critically constrained as indicated by a current ratio of 0.08, meaning current liabilities significantly outweigh current assets and short-term solvency is precarious. Return on Equity is not available due to negative equity, while Return on Assets stands at -85.6%, reflecting that the company's asset base is currently generating value that is being consumed by losses rather than producing returns.
Valuation Assessment
Trailing twelve-month P/E and forward P/E ratios are both unavailable (N/A) due to the company's negative earnings, preventing a traditional earnings-based valuation comparison. The absence of a positive P/E implies that the market cannot value the stock based on current profitability but must instead rely on alternative metrics like asset or sales multiples. The price-to-book ratio is -3.38, a negative figure that indicates the market values the company well below its book value, often a sign of deep distress or a market discount applied to the equity. Using price-to-sales as an alternative valuation metric, the stock trades at 2.15 times revenue, which suggests the market is pricing the entity based on its sales volume rather than its earnings power. Additionally, the EV/EBITDA multiple is -1.53, further confirming that traditional enterprise value multiples are distorted by the company's negative earnings and capital structure. The stock has traded within a range defined by a 52-week high of $4.53 and a 52-week low of $1.36, placing the current price somewhere within this historical band and reflecting significant recent volatility. With a beta of 2.13, the stock exhibits high price volatility relative to the broader market, moving more than twice as much as the benchmark index during periods of market fluctuation.
Growth & Income
Revenue growth stands at 7.8% year-over-year, while earnings growth is not applicable (N/A) due to the company reporting a net loss over the trailing twelve months. The inability to calculate earnings growth highlights that the company is still in a phase of expansion where top-line growth has not yet translated into bottom-line profitability, a common scenario for franchise-heavy businesses scaling operations. The company does not pay dividends, evidenced by a dividend yield of N/A and a payout ratio of 0.0%, meaning all available cash flow is retained within the business or used to service debt rather than distributed to shareholders. This reinvestment strategy suggests management is prioritizing capital expenditure and working capital maintenance over returning capital to investors, which is typical for firms with negative earnings seeking to stabilize operations. The overall growth and income profile presents a dichotomy of expanding sales volume paired with a lack of current income generation, requiring investors to assess whether the 7.8% revenue trajectory can eventually convert into sustainable profitability to support future dividend potential or share repurchases.