Regis (RGS) AI Stock Analysis

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Regis

(NASDAQ:RGS)

65Neutral

Regis Corporation's overall stock score reflects a balance of significant strengths and challenges. The company is making notable strides in improving profitability and cash flow, supported by strategic acquisitions and brand transformation. However, the challenges of declining revenues, high leverage, and same-store sales declines are notable risks. The technical analysis indicates positive short-term momentum, while the valuation suggests the stock is undervalued. The company's ability to sustain and enhance its recent financial improvements will be crucial in determining its future stock performance.

Regis (RGS) vs. S&P 500 (SPY)

Market Cap

$46.60M

Dividend YieldN/A

Average Volume (3M)10.07K

Price to Earnings (P/E)0.6

Beta (1Y)0.72

Revenue Growth-11.38%

EPS GrowthN/A

CountryUS

Employees1,945

SectorConsumer Cyclical

Sector Strength67

IndustryPersonal Products & Services

Share Statistics

EPS (TTM)0.43

Shares Outstanding2,435,979

10 Day Avg. Volume5,155

30 Day Avg. Volume10,069

Financial Highlights & Ratios

PEG Ratio0.06

Price to Book (P/B)0.67

Price to Sales (P/S)0.00

P/FCF Ratio9.12

Enterprise Value/Market Cap9.14

Enterprise Value/Revenue0.53

Enterprise Value/Gross Profit5.27

Enterprise Value/Ebitda1.69

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Regis Business Overview & Revenue Model

Company DescriptionRegis Corporation (RGS) is a leader in the beauty salon industry, primarily operating and franchising hair care salons across North America. The company owns and operates well-known salon brands, including Supercuts, Cost Cutters, and SmartStyle, which are typically located in shopping malls and high traffic areas. Regis offers a wide range of hair care services and products, catering to diverse customer needs with a focus on convenience and affordability.

How the Company Makes MoneyRegis Corporation primarily generates revenue through the operation and franchising of hair salons. The company's income is derived from two main sources: the direct operation of company-owned salons and the collection of franchise fees and royalties from independently owned franchises. Revenue from company-owned salons comes from the provision of haircuts, coloring, styling services, and the sale of hair care products. Franchise revenue involves initial franchise fees paid by franchisees to use Regis' brands, as well as ongoing royalties based on a percentage of the franchisees' sales. Regis also benefits from strategic partnerships with product manufacturers and distributors, enhancing its product offerings and contributing to its revenue streams.

Regis Financial Statement Overview

Summary

Regis shows a mixed financial picture with commendable profitability improvements and a recovery in cash flows. However, declining revenues and high leverage present ongoing challenges. The company must focus on stabilizing revenue streams and managing debt levels to enhance financial stability and capital structure.

Income Statement

Positive

Regis has demonstrated significant improvements in profitability over recent periods, with a strong TTM net profit margin of 50.0% and a positive EBIT margin of 8.5% in TTM, indicating effective cost management and operational efficiency. However, the company has experienced a declining revenue trend from $415.1M in 2021 to $191.3M in TTM, which poses a challenge for sustaining long-term growth.

Balance Sheet

Negative

The balance sheet reflects high leverage with a debt-to-equity ratio of 4.16 in TTM, showing significant reliance on debt financing. Stockholders' equity remains low at $66.7M as of TTM, although improved from prior negative equity positions. The equity ratio of 12.6% in TTM indicates limited asset backing, which could be a risk if financial conditions worsen.

Cash Flow

Neutral

Regis has improved its cash flow position, turning to positive free cash flow of $5.1M in TTM from previous negative figures. The operating cash flow to net income ratio of 0.06 in TTM suggests that while positive, operating cash flows are not yet robust. Free cash flow growth is significant, but sustainability remains a concern given past volatility.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
191.34M	202.98M	233.33M	275.97M	415.11M	669.73M
	Gross Profit
80.74M	101.76M	76.54M	65.62M	129.41M	235.55M
	EBIT
16.31M	20.89M	8.78M	-15.24M	-91.13M	-80.28M
	EBITDA
74.80M	68.74M	17.30M	-22.67M	-81.44M	-108.39M
	Net Income Common Stockholders
95.66M	91.06M	-7.38M	-46.46M	-113.33M	-172.19M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
10.20M	10.07M	9.51M	17.04M	19.19M	113.67M
	Total Assets
530.11M	530.50M	607.38M	769.30M	996.38M	1.34B
	Total Debt
389.38M	399.28M	550.65M	691.63M	822.25M	1.02B
	Net Debt
379.18M	389.21M	541.14M	674.59M	803.06M	909.54M
	Total Liabilities
463.39M	473.71M	644.11M	800.25M	979.34M	1.22B
	Stockholders Equity
66.72M	56.79M	-36.73M	-30.95M	17.05M	125.70M
Cash Flow		Free Cash Flow
5.10M	-2.42M	-8.37M	-43.95M	-111.36M	-123.90M
	Operating Cash Flow
5.60M	-2.04M	-7.89M	-38.64M	-99.88M	-86.41M
	Investing Cash Flow
-8.66M	1.62M	4.02M	7.68M	-2.10M	61.03M
	Financing Cash Flow
13.72M	8.36M	-2.15M	29.42M	7.78M	56.16M

Regis Technical Analysis

Technical Analysis Sentiment

Positive

Last Price21.25

Price Trends

50DMA

18.21

Positive

100DMA

20.91

Positive

200DMA

22.21

Negative

Market Momentum

MACD

0.42

Negative

RSI

66.11

Neutral

STOCH

70.07

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RGS, the sentiment is Positive. The current price of 21.25 is above the 20-day moving average (MA) of 18.49, above the 50-day MA of 18.21, and below the 200-day MA of 22.21, indicating a neutral trend. The MACD of 0.42 indicates Negative momentum. The RSI at 66.11 is Neutral, neither overbought nor oversold. The STOCH value of 70.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RGS.

Regis Risk Analysis

Regis disclosed 31 risk factors in its most recent earnings report. Regis reported the most risks in the “Ability to Sell” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Regis Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RGS	65 Neutral	$46.60M	0.58	548.07%	―	-11.38%	―
Sector *	61 Neutral	$6.93B	11.84	2.89%	3.91%	2.59%	-21.68%
MED	56 Neutral	$144.20M	66.49	-3.32%	―	-39.47%	-110.28%
XWEL	44 Neutral	$4.52M	―	-275.96%	―	12.58%	47.24%
MRM	38 Underperform	$6.87M	5.43	23.48%	―	-7.60%	-118.80%
WW	33 Underperform	$30.51M	―	31.02%	―	-10.33%	79.59%
TRNR	27 Underperform	$7.15M	―	-4470.12%	―	459.36%	70.21%

* Consumer Cyclical Sector Average

Performance Comparison

RGS

Regis

21.05

14.57

224.85%

MED

Medifast

12.72

-12.64

-49.84%

XWEL

XWELL

0.91

-0.93

-50.54%

WW International

0.28

-1.63

-85.34%

MRM

MEDIROM Healthcare Technologies

0.96

-4.44

-82.22%

TRNR

Interactive Strength Inc

0.76

-685.30

-99.89%

Regis Earnings Call Summary

Earnings Call Date:May 13, 2025

(Q3-2025)

% Change Since: 11.08%|

Next Earnings Date:Aug 20, 2025

Earnings Call Sentiment Positive

The earnings call reflects significant progress in the company's transformation strategy, with notable achievements in profitability and cash flow generation. However, challenges remain in reversing traffic declines and improving same-store sales, particularly in the SmartStyle brand.

Q3-2025 Updates

Positive Updates

Significant EBITDA and Operating Income Growth

Adjusted EBITDA grew 33% and operating income grew by 23% compared to the fiscal third quarter of the previous year. Both reported and adjusted earnings per share shifted from negative to positive.

Positive Cash Flow Generation

Generated more than $6 million in cash from operations, marking the second consecutive quarter of positive cash flow for the first time since the first fiscal quarter in 2018.

Successful Acquisition of Alline Salon Group

The acquisition of Alline Salon Group expanded growth and cash generation levers, contributing positively to results immediately upon closing.

Improvement in Same-Store Sales

Same-store sales in the Alline portfolio improved from a 7.5% decline in January to a 2.7% decline in March, turning positive in April.

Supercuts Brand Performance

Supercuts saw a same-store sales increase of 1.1% for the third quarter, with April showing a further increase of 4.5%.

Negative Updates

Modest Decline in Consolidated Same-Store Sales

Consolidated same-store sales saw a decline of 1.1%, driven by timing of Easter, continued softness in overall salon traffic, and new guest visits.

SmartStyle Brand Decline

SmartStyle experienced a 7.4% same-store sales decline for the quarter.

Salon Closures

49 net closures of underperforming stores, with a performance gap of $350,000 between closed stores and top-performing units.

Company Guidance

During the Regis Third Quarter 2025 Earnings Conference Call, the company provided various metrics and updates on its transformation strategy aimed at achieving long-term growth and profitability. Key highlights included a 33% increase in adjusted EBITDA and a 23% rise in operating income compared to the same quarter last year. Regis reported positive operating cash flow of over $6 million, marking the second consecutive quarter of positive cash flow for the first time since the first fiscal quarter of 2018. Same-store sales showed a modest decline of 1.1%, influenced by factors such as the timing of Easter and softness in salon traffic. Despite this, the Supercuts brand saw a 1.1% increase in same-store sales, contributing significantly to overall results. The company-owned salon segment benefited from the recent acquisition of the Alline Salon Group, which, although its contribution was modest this quarter, is expected to drive future growth and cash generation. Additionally, Regis has implemented strategic initiatives, including a new pay plan for stylists and revised pricing structures, to align incentives and improve profitability, with early positive results observed in April. Looking ahead, Regis plans to focus on optimizing and growing sales and profitability in its company-owned salon portfolio and advancing the holistic Supercuts brand transformation agenda, ultimately aiming to enhance stakeholder value.

Regis Corporate Events

M&A TransactionsBusiness Operations and Strategy

Regis Corporation Expands with Strategic Acquisition of Alline

Positive

Dec 19, 2024

Regis Corporation has acquired Alline Salon Group, its largest franchisee, for $22 million in cash and stock, with potential additional earn-out payments. The acquisition strengthens Regis’ operational footprint and provides a testing ground for brand initiatives, maintaining an asset-light model with most salons still franchisee-owned. This strategic move is expected to enhance Regis’ EBITDA and provide value creation opportunities, aligning stakeholder interests towards success.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.