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The ONE Group Hospitality Inc (STKS)
NASDAQ:STKS
Top Page
The ONE Group Hospitality
(NASDAQ:STKS)
61Neutral
Positive Factors
Acquisition Impact
The May 2024 Benihana/RA Sushi acquisition is a transformational event for the ONE Group, more than doubling run rate revenue and adjusted EBITDA.
Financial Performance
AEBITDA and margin guidance also above expectations, with cost savings initiatives in place.
Growth Potential
Significant whitespace expansion potential exists across the brand portfolio, both domestically and internationally.
Negative Factors
Economic Environment
Economic uncertainty remains an overhang to posting solid SSS growth, with modest negative SSS expected in 1Q25.
Profitability Projections
2024 and 2025 EPS estimates significantly lowered, indicating reduced profitability projections.
SSS Growth Visibility
Current valuation reflects a lack of near- to medium-term SSS growth visibility across all brands, complicated by the financing costs of the acquisition of Benihana.
The ONE Group Hospitality (STKS) vs. S&P 500 (SPY)
Market Cap
$131.65M
Dividend YieldN/A
Average Volume (3M)76.59K
Price to Earnings (P/E)―
Beta (1Y)1.28
Revenue Growth138.50%
EPS Growth-60576.19%
CountryUS
Employees10,800
SectorConsumer Cyclical
Sector Strength73
IndustryRestaurants
Share Statistics
EPS (TTM)0.14
Shares Outstanding30,902,798
10 Day Avg. Volume69,985
30 Day Avg. Volume76,589
Financial Highlights & Ratios
PEG Ratio0.62
Price to Book (P/B)0.58
Price to Sales (P/S)0.00
P/FCF Ratio-4.39
Enterprise Value/Market Cap5.57
Enterprise Value/Revenue0.37
Enterprise Value/Gross Profit3.12
Enterprise Value/Ebitda3.58
Forecast
1Y Price Target
$4.80Price Target Upside12.68% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
The ONE Group Hospitality Business Overview & Revenue Model
Company DescriptionThe ONE Group Hospitality, Inc. (STKS) is a global hospitality company that develops and operates upscale, high-energy restaurants and lounges. The company is best known for its STK brand, which combines a modern steakhouse and a chic lounge into one unique dining experience. With locations across major cities in the United States and internationally, The ONE Group focuses on creating memorable experiences through its innovative cuisine and vibrant atmosphere.
How the Company Makes MoneyThe ONE Group Hospitality primarily generates revenue through its chain of STK restaurants. The company's revenue model includes several streams: dining services, where revenue is earned through food and beverage sales in their upscale restaurants; event hosting, where venues are rented out for private events and parties; and management and licensing fees, which come from managing and licensing the STK brand to third-party operators in various locations. The company also benefits from strategic partnerships and collaborations with hospitality and entertainment brands, enhancing its market reach and brand visibility. Additionally, The ONE Group leverages its loyalty and rewards programs to encourage repeat business and increase customer spending.
The ONE Group Hospitality Financial Statement Overview
Summary
The ONE Group Hospitality exhibits strong revenue growth but faces profitability and financial stability challenges. Positive operating cash flow and growth opportunities are countered by high leverage and inconsistent net income.Income Statement
The ONE Group Hospitality shows a strong revenue growth trend, increasing from $120.7M in 2019 to $673.3M in 2024. However, the company struggles with profitability, as evidenced by the negative net income in 2024. Gross profit margins have been relatively stable, but net profit margins have fluctuated significantly, indicating challenges in controlling costs or achieving operational efficiencies.65
Positive
Balance Sheet
The company's balance sheet highlights a high debt-to-equity ratio, reflecting high leverage that could pose financial risks. Stockholders' equity has decreased over the years, which, when combined with rising liabilities, suggests financial vulnerability. However, the increase in total assets indicates potential growth opportunities.58
Neutral
Cash Flow
The cash flow statement reveals volatility, with negative free cash flow in recent years despite positive operating cash flow. The negative free cash flow is concerning as it indicates challenges in funding operations and investments without relying on external financing. Yet, operating cash flow has generally been positive, suggesting underlying operational strength.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 673.34M | 332.77M | 316.64M | 277.18M | 141.94M | Gross Profit |
| 122.75M | 65.79M | 66.58M | 65.18M | 20.88M | EBIT |
| 10.77M | 9.29M | 23.39M | 19.39M | 7.04M | EBITDA |
| 40.72M | 34.02M | 31.35M | 38.57M | 6.79M | Net Income Common Stockholders |
| -15.82M | 4.72M | 13.53M | 31.35M | -13.62M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 28.07M | 21.05M | 55.12M | 23.61M | 24.39M | Total Assets |
| 959.35M | 317.25M | 291.02M | 229.84M | 215.57M | Total Debt |
| 641.02M | 200.17M | 183.63M | 132.64M | 159.09M | Net Debt |
| 613.44M | 179.12M | 128.51M | 109.03M | 134.71M | Total Liabilities |
| 756.75M | 249.88M | 222.43M | 169.31M | 193.59M | Stockholders Equity |
| 205.25M | 69.18M | 69.71M | 61.20M | 23.18M |
| Cash Flow | Free Cash Flow | |||
| -27.37M | -22.77M | -7.38M | 19.50M | -5.36M | Operating Cash Flow |
| 44.19M | 30.78M | 25.25M | 30.97M | 431.00K | Investing Cash Flow |
| -441.39M | -53.55M | -32.63M | -11.47M | -5.79M | Financing Cash Flow |
| 404.34M | -11.25M | 39.10M | -20.27M | 17.42M |
The ONE Group Hospitality Technical Analysis
Positive
4.26
Price Trends
3.05
Positive
3.14
Positive
3.33
Positive
Market Momentum
0.38
Negative
68.96
Neutral
79.45
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STKS, the sentiment is Positive. The current price of 4.26 is above the 20-day moving average (MA) of 3.40, above the 50-day MA of 3.05, and above the 200-day MA of 3.33, indicating a bullish trend. The MACD of 0.38 indicates Negative momentum. The RSI at 68.96 is Neutral, neither overbought nor oversold. The STOCH value of 79.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STKS.
The ONE Group Hospitality Risk Analysis
The ONE Group Hospitality disclosed 29 risk factors in its most recent earnings report. The ONE Group Hospitality reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
The ONE Group Hospitality Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $43.46M | 13.47 | 5.48% | 2.09% | 8.87% | -5.22% | |
61 Neutral | $6.99B | 11.27 | 2.81% | 3.90% | 2.61% | -21.77% | |
61 Neutral | $131.65M | ― | -9.31% | ― | 138.50% | -60576.19% | |
41 Neutral | $45.70M | ― | 38.50% | 20.82% | 10.63% | -93.67% | |
41 Neutral | $40.89M | ― | -978.37% | ― | -0.61% | -200.32% | |
38 Underperform | $89.62M | ― | ― | -2.48% | 24.95% | ||
38 Underperform | $53.74M | ― | 92.02% | ― | -4.19% | -266.52% |
* Consumer Cyclical Sector Average
Performance Comparison
STKS
The ONE Group Hospitality
4.26
-1.10
-20.52%
BDL
Flanigan's Enterprises
23.38
-4.24
-15.35%
RRGB
Red Robin Gourmet
3.28
-3.73
-53.21%
NDLS
Noodles & Co
0.89
-1.22
-57.82%
FAT
Fat Brands
2.55
-0.32
-11.15%
THCH
TH International
2.68
-2.92
-52.14%
The ONE Group Hospitality Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 36.54%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue growth and profitability driven by strategic acquisitions and expansion. However, challenges like comparable sales decline, net loss, and increased operating expenses were notable concerns. The company's strategic initiatives and synergies from acquisitions are promising, but the current economic environment poses challenges.Q1-2025 Updates
Positive Updates
Significant Revenue Growth
First quarter revenues increased by almost 150% to $211 million, driven by contributions from Benihana and RA Sushi and strong transaction growth at STK.
Improved Profitability
Adjusted EBITDA grew by over 230% to $25.2 million, with restaurant-level EBITDA margins of 20.1% for Benihana and 17.7% for STK.
Strategic Expansion
Opened new company-owned Benihana in San Mateo, California, and a new STK restaurant in Topanga, California. Plans to open five to seven new venues in 2025.
Operational Efficiencies and Integration Synergies
Integration of Benihana led to synergies with expected annual savings of at least $20 million by 2026. Efficiencies realized through logistics, reservation systems, and streamlined operations.
Launch of Friends with Benefits Rewards Program
Introduced a new loyalty program to enhance guest experiences and drive customer engagement across multiple brands.
Negative Updates
Comparable Sales Decline
Consolidated comparable sales decreased by 3.2% in the first quarter, with projections indicating further declines in the second quarter.
Net Loss
Reported a net loss available to common stockholders of $6.6 million or $0.21 net loss per share for the first quarter.
Challenges in Casual Dining Segment
Noted pressure from competitors using TV promotions and high-value offerings, requiring increased grassroots marketing efforts.
Increased Operating Expenses
General and administrative costs increased by 73.8% driven by the Benihana acquisition, and operating expenses increased due to fixed cost deleveraging.
Company Guidance
In the first quarter of fiscal year 2025, The ONE Group reported a significant increase in revenues, reaching $211 million, which marks an almost 150% growth compared to the previous year. This growth was driven by contributions from newly acquired brands, Benihana and RA Sushi, as well as strong performance from new units. The company achieved a robust 4.1% transaction growth at its flagship STK brand and improved restaurant-level EBITDA margins by 50 basis points to 16.4%. Notably, Benihana and STK concepts posted industry-leading margins of 20.1% and 17.7%, respectively. Adjusted EBITDA surged over 230% to $25.2 million, reflecting the effectiveness of strategic initiatives and cost management. The company also emphasized the development of its franchising strategy with plans to open five to seven new venues in 2025, aiming for long-term growth and a target of $5 billion in system-wide sales.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.