Red Robin Gourmet Burgers Inc (NASDAQ: RRGB)

Sector: Consumer Cyclical Industry: Restaurants CIK: 0001171759
Market Cap 68.68 Mn
P/B -0.71
P/E -1.30
P/S 0.06
ROIC (Qtr) -6.21
Div Yield % 0.00
Rev 1y % (Qtr) -3.46
Total Debt (Qtr) 526.63 Mn
Debt/Equity (Qtr) -5.48

About

Red Robin Gourmet Burgers, Inc., commonly known by its ticker symbol RRGB, is a casual dining restaurant chain that operates in North America. The company is well-known for its commitment to quality, service, and value, as well as its focus on sustainability and social responsibility. Red Robin operates as a single segment, with a focus on serving high-quality burgers and American favorites in a fun and welcoming environment. The company's menu features a range of options, including its signature Gourmet Burgers, as well as other items such as...

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Price action

Investment thesis

Bull case

  • Operating cash flow of 31.21M provides strong 10.27x coverage of stock compensation 3.04M, indicating sustainable incentive practices.
  • Tangible assets of 564.58M provide exceptional 39.32x coverage of deferred revenue 14.36M, showing strong service capability backing.
  • Tangible assets of 564.58M provide robust 5.37x coverage of other current liabilities 105.13M, indicating strong asset backing.
  • Retained earnings of (166.14M) represent substantial 1.73x of equity (96.09M), indicating strong internal capital generation.
  • Cash reserves of 30.87M exceed inventory value of 26.16M by 1.18x, indicating strong liquidity and inventory management.

Bear case

  • Operating cash flow of 31.21M barely covers its investment activities of (25.60M), with a coverage ratio of -1.22, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating earnings of (26.59M) show weak coverage of depreciation charges of 51.87M, with a -0.51 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 5.61M provides weak coverage of capital expenditures of 25.60M, with a 0.22 ratio suggesting additional external financing needs for growth initiatives.
  • Free cash flow of 5.61M represents just -0.36x of debt issuance (15.39M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • High depreciation of 51.87M relative to operating cash flow of 31.21M, which is 1.66x suggests significant maintenance capital requirements affecting free cash flow.

Peer comparison

Companies in the Restaurants
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MCD Mcdonalds Corp 222.05 Bn 26.39 8.45 55.82 Bn
2 SBUX Starbucks Corp 95.51 Bn 51.45 2.57 26.61 Bn
3 CMG Chipotle Mexican Grill Inc 50.94 Bn 33.15 4.32 4.98 Bn
4 YUM Yum Brands Inc 43.17 Bn 29.83 5.36 11.55 Bn
5 QSR Restaurant Brands International Inc. 22.43 Bn 24.33 2.42 15.64 Bn
6 DRI Darden Restaurants Inc 21.91 Bn 19.91 1.77 6.16 Bn
7 YUMC Yum China Holdings, Inc. 18.12 Bn 20.05 1.57 1.84 Bn
8 DPZ Dominos Pizza Inc 14.57 Bn 24.72 3.01 5.05 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.97 2.05
EV to Cash from Ops. EV/CFO 17.89 16.57
EV to Debt EV to Debt 1.06 4.75
EV to EBIT EV/EBIT -21.00 3.45
EV to EBITDA EV/EBITDA 22.24 9.76
EV to Free Cash Flow [EV/FCF] EV/FCF 99.45 29.06
EV to Market Cap EV to Market Cap 8.13 6.55
EV to Revenue EV/Rev 0.46 2.40
Price to Book Value [P/B] P/B -0.71 -1.40
Price to Earnings [P/E] P/E -1.30 13.35
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -9.56
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 18.72
Dividend per Basic Share Div per Share (Qtr) 0.00 0.84
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 30.41
Interest Coverage Int. cover (Qtr) -1.01 -86.85
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -334.35 -24.56
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 1.93 35.50
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.72
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -0.44 -564.81
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -19.83 25.78
EBIT Growth (1y) % EBIT 1y % (Qtr) -0.17 -507.68
EBT Growth (1y) % EBT 1y % (Qtr) -2.32 -41.98
EPS Growth (1y) % EPS 1y % (Qtr) 1.22 -126.51
FCF Growth (1y) % FCF 1y % (Qtr) 124.87 5,724.78
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 5.02 23.70
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 2.14 0.99
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.07
Cash Ratio Cash Ratio (Qtr) 0.17 0.78
Current Ratio Curr Ratio (Qtr) 0.43 1.47
Debt to Equity Ratio Debt/Equity (Qtr) -5.48 0.05
Interest Cover Ratio Int Coverage (Qtr) -1.01 -86.85
Times Interest Earned Times Interest Earned (Qtr) -1.01 -86.85
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 2.10 7.71
EBIT Margin % EBIT Margin % (Qtr) -2.17 -2.27
EBT Margin % EBT Margin % (Qtr) -4.31 -1.97
Gross Margin % Gross Margin % (Qtr) 14.10 34.04
Net Profit Margin % Net Margin % (Qtr) -4.30 -3.69