Company Overview
Red Robin Gourmet Burgers, Inc. develops, operates, and franchises casual dining restaurants across North America and one Canadian province, with its menu centered on burgers, pizza, appetizers, salads, entrees, desserts, wings, milkshakes, and alcoholic beverages. The company operates within the Consumer Cyclical sector, specifically the Restaurants industry, positioning it as a discretionary consumer staple subject to economic cycles and consumer spending patterns. As of the latest data, the entity holds a market capitalization of $48.06M, reports annual revenue of $1.21B, and employs 18852 individuals. These financial metrics indicate that Red Robin maintains a significant operational footprint despite its relatively modest market capitalization, suggesting a business model that relies heavily on scale and volume to generate returns rather than high per-share profitability. The disparity between its substantial revenue and small market cap often reflects market sentiment regarding its profitability trajectory and future earnings potential in the competitive quick-service and casual dining landscape.
Financial Health
The company reported total revenue of $1.21B over the trailing twelve months, while net income stands at -$23.284M, revealing a significant gap between top-line sales and bottom-line profitability that points to a high cost structure or operational inefficiencies. Despite the negative net income, the company generated EBITDA of $64.37M, indicating that core operating cash generation before interest and taxes remains positive even when accounting for non-operating expenses or one-time charges. Free cash flow for the period was $31.47M, which provides a degree of financial flexibility allowing the company to service debt obligations or fund capital expenditures without relying solely on external financing. The gross margin is 14.2%, reflecting the cost of goods sold relative to sales, while the operating margin is -1.7% and the profit margin is -1.9%, collectively indicating that the company is currently operating at a loss on a percentage basis despite high sales volume. In terms of liquidity, the company holds $19.92M in cash against total debt of $520.64M, creating a leverage scenario where debt obligations significantly exceed liquid assets on hand. The debt-to-equity ratio is listed as N/A due to the negative equity position implied by the price-to-book ratio, while the current ratio of 0.45 suggests that current liabilities exceed current assets, signaling potential short-term liquidity pressure. Return on Equity is N/A because the company has negative equity, but the return on assets is 1.4%, which suggests that the company is generating a small positive return on its asset base despite its overall net loss.
Valuation Assessment
The trailing twelve-month P/E ratio is N/A due to the negative net income, whereas the forward P/E is 17.67, implying that the market is pricing in a significant turnaround or future earnings growth that does not yet reflect in current profitability. The price-to-book ratio is -0.45, which indicates that the market values the company at a negative multiple of its book value, a metric often seen in distressed firms or those with significant accumulated losses. Alternative valuation metrics show a price-to-sales ratio of 0.04 and an EV/EBITDA of 8.52, suggesting that the market is valuing the company very cheaply relative to its sales and adjusted earnings before interest, taxes, depreciation, and amortization. The stock has a 52-week high of $7.89 and a 52-week low of $2.50, meaning the current trading price sits significantly below the recent peak and within the lower range of its historical volatility. With a beta of 2.16, the stock exhibits high price volatility relative to the broader market, moving more than twice as much as the benchmark index in response to market fluctuations.
Growth & Income
Revenue growth year-over-year is -5.7%, while earnings growth is N/A due to negative earnings, indicating that the company is currently shrinking in size rather than expanding its top line. Because the company is not a dividend payer, the dividend yield is N/A and the payout ratio is 0.0%, meaning the company retains all of its earnings rather than distributing them to shareholders. This retention strategy implies that the company is reinvesting its resources into operations, debt reduction, or strategic initiatives rather than providing current income to investors. The overall growth and income profile for Red Robin Gourmet Burgers, Inc. is characterized by declining revenue, a lack of dividend distribution, and a negative earnings environment, presenting a high-risk, high-volatility investment case with no current income yield.