Kura Sushi Usa, Inc. (NASDAQ: KRUS)

Sector: Consumer Cyclical Industry: Restaurants CIK: 0001772177
Market Cap 991.87 Mn
P/B 4.33
P/E -247.78
P/S 3.40
ROIC (Qtr) -1.72
Div Yield % 0.00
Rev 1y % (Qtr) 13.96
Total Debt (Qtr) 187.41 Mn
Debt/Equity (Qtr) 0.82

About

Kura Sushi USA, Inc., commonly known as KRUS, operates in the restaurant industry, specifically offering a technology-enabled Japanese dining experience. With 54 locations spread across 15 states and Washington D.C., Kura Sushi is a subsidiary of Kura Sushi, Inc., a Japan-based revolving sushi chain that boasts over 500 restaurants and four decades of brand history. Kura Sushi's main business activities revolve around providing an innovative dining experience through its "Kura Experience." This unique concept combines elements of beautifully crafted...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 35.37M provide 2.39x coverage of short-term debt 14.78M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 20.88M provides exceptional 278.37x coverage of interest expenses 75000, showing strong debt service capability.
  • Robust tangible asset base of 443.51M provides 18.15x coverage of working capital 24.44M, indicating strong operational backing.
  • Short-term investments of 15.34M provide solid 2.21x coverage of other current liabilities 6.94M, indicating strong liquidity.
  • Tangible assets of 443.51M provide robust 63.91x coverage of other current liabilities 6.94M, indicating strong asset backing.

Bear case

  • Operating cash flow of 20.88M barely covers its investment activities of (93.89M), with a coverage ratio of -0.22, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Free cash flow of (29.38M) provides weak coverage of capital expenditures of 50.26M, with a -0.58 ratio suggesting additional external financing needs for growth initiatives.
  • The company's operating cash flow of 20.88M shows concerning coverage of stock compensation expenses of 4.71M, with a 4.43 ratio indicating potential earnings quality issues.
  • High receivables of 6.41M relative to inventory of 2.45M (2.61 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating earnings of (3.76M) show weak coverage of depreciation charges of 13.68M, with a -0.27 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Restaurants
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MCD Mcdonalds Corp 269.29 Bn 53.02 11.14 55.82 Bn
2 SBUX Starbucks Corp 113.46 Bn 82.87 3.01 25.47 Bn
3 CMG Chipotle Mexican Grill Inc 52.60 Bn 34.25 4.41 5.08 Bn
4 YUM Yum Brands Inc 45.81 Bn 28.68 6.47 11.55 Bn
5 DRI Darden Restaurants Inc 28.08 Bn 75.62 5.18 6.41 Bn
6 DPZ Dominos Pizza Inc 23.46 Bn 237.88 14.39 -
7 QSR Restaurant Brands International Inc. 23.10 Bn 25.05 2.49 15.64 Bn
8 YUMC Yum China Holdings, Inc. 21.65 Bn 23.95 1.87 1.84 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.51 2.29
EV to Cash from Ops. EV/CFO 53.38 24.12
EV to Debt EV to Debt 5.95 5.80
EV to EBIT EV/EBIT -296.69 -9.51
EV to EBITDA EV/EBITDA 166.10 18.40
EV to Free Cash Flow [EV/FCF] EV/FCF -37.93 21.49
EV to Market Cap EV to Market Cap 1.12 2.46
EV to Revenue EV/Rev 3.82 3.21
Price to Book Value [P/B] P/B 4.33 -1.58
Price to Earnings [P/E] P/E -247.78 27.33
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -9.76
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 22.01
Dividend per Basic Share Div per Share (Qtr) 0.00 0.94
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 33.46
Interest Coverage Int. cover (Qtr) -50.08 -92.74
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -6.64 -25.92
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -67.16 33.72
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 3.33
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 48.80 -120.58
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 469.04 -20.60
EBIT Growth (1y) % EBIT 1y % (Qtr) 49.91 11.80
EBT Growth (1y) % EBT 1y % (Qtr) 49.26 -45.23
EPS Growth (1y) % EPS 1y % (Qtr) 53.62 -136.44
FCF Growth (1y) % FCF 1y % (Qtr) 0.68 6,077.93
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 3.38 24.40
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.66 1.02
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.09
Cash Ratio Cash Ratio (Qtr) 0.88 0.80
Current Ratio Curr Ratio (Qtr) 1.61 1.56
Debt to Equity Ratio Debt/Equity (Qtr) 0.82 0.61
Interest Cover Ratio Int Coverage (Qtr) -50.08 -92.74
Times Interest Earned Times Interest Earned (Qtr) -50.08 -92.74
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 3.40 8.18
EBIT Margin % EBIT Margin % (Qtr) -1.29 -2.07
EBT Margin % EBT Margin % (Qtr) -1.31 -0.92
Gross Margin % Gross Margin % (Qtr) 11.00 34.54
Net Profit Margin % Net Margin % (Qtr) -1.40 -2.79