Nathans Famous, Inc. (NASDAQ: NATH)

Sector: Consumer Cyclical Industry: Restaurants CIK: 0000069733
Market Cap 414.19 Mn
P/B -27.13
P/E 19.31
P/S 2.63
ROIC (Qtr) 48.19
Div Yield % 4.45
Rev 1y % (Qtr) 8.86
Total Debt (Qtr) 52.98 Mn
Debt/Equity (Qtr) -3.47

About

Nathan's Famous, Inc., often recognized by its stock symbol NAT, operates in the foodservice industry. Its rich history dates back to 1916 when it first opened as a nickel hot dog stand on Coney Island. Today, Nathan's Famous is a leading branded licensor, wholesaler, and retailer of products marketed under its Nathan's Famous brand, including its popular Nathan's World Famous Beef Hot Dogs. Nathan's Famous generates revenue through various channels, including its licensing program, branded product program, and franchise operations. The company's...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 22.48M provides robust 0.42x coverage of total debt 52.98M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 24.55M provide 5.66x coverage of short-term debt 4.34M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 22.48M provides strong 19.72x coverage of stock compensation 1.14M, indicating sustainable incentive practices.
  • Robust free cash flow of 22.10M exceeds capital expenditure of 386000 by 57.24x, indicating strong organic growth funding capability.
  • Operating cash flow of 22.48M fully covers other non-current liabilities 1.46M by 15.37x, showing strong long-term stability.

Bear case

  • Operating cash flow of 22.48M barely covers its investment activities of (386000), with a coverage ratio of -58.24, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 22.48M provides thin coverage of dividend payments of (18.40M) with a -1.22 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • High receivables of 17.73M relative to inventory of 680000 (26.07 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of 22.10M represents just -9.21x of debt issuance (2.40M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Tangible assets of 50.45M provide limited backing for working capital of 27.85M, which is 1.81x, suggesting increased operational risk in market downturns.

Segments Breakdown of Revenue (2025)

Product and Service Breakdown of Revenue (2025)

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 8.56 2.29
EV to Cash from Ops. EV/CFO 19.39 24.12
EV to Debt EV to Debt 8.23 5.80
EV to EBIT EV/EBIT 13.28 -9.51
EV to EBITDA EV/EBITDA 13.33 18.40
EV to Free Cash Flow [EV/FCF] EV/FCF 19.73 21.49
EV to Market Cap EV to Market Cap 1.05 2.46
EV to Revenue EV/Rev 2.76 3.21
Price to Book Value [P/B] P/B -27.13 -1.58
Price to Earnings [P/E] P/E 19.31 27.33
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.17 -9.76
Dividend Payout Ratio % Div Payout % (Qtr) 85.90 22.01
Dividend per Basic Share Div per Share (Qtr) 4.50 0.94
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 83.30 33.46
Interest Coverage Int. cover (Qtr) 11.06 -92.74
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -60.17 -25.92
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 3.52 33.72
Dividend Growth (1y) % Div 1y % (Qtr) 125.00 3.33
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -12.52 -120.58
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -13.70 -20.60
EBIT Growth (1y) % EBIT 1y % (Qtr) -11.66 11.80
EBT Growth (1y) % EBT 1y % (Qtr) -8.62 -45.23
EPS Growth (1y) % EPS 1y % (Qtr) -9.81 -136.44
FCF Growth (1y) % FCF 1y % (Qtr) -10.23 6,077.93
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -8.22 24.40
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 3.10 1.02
Cash Payout Ratio Cash Payout (Qtr) 0.80 0.09
Cash Ratio Cash Ratio (Qtr) 1.52 0.80
Current Ratio Curr Ratio (Qtr) 2.73 1.56
Debt to Equity Ratio Debt/Equity (Qtr) -3.47 0.61
Interest Cover Ratio Int Coverage (Qtr) 11.06 -92.74
Times Interest Earned Times Interest Earned (Qtr) 11.06 -92.74
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 21.40 8.18
EBIT Margin % EBIT Margin % (Qtr) 20.80 -2.07
EBT Margin % EBT Margin % (Qtr) 18.92 -0.92
Gross Margin % Gross Margin % (Qtr) 30.70 34.54
Net Profit Margin % Net Margin % (Qtr) 13.60 -2.79