NATH  Nathan's Famous Inc.

Exchange

NASDAQ

Sector

Consumer Services

Industry

Restaurants

Market Cap.

322.20M

Vuru Grade

49.73/100

Current Price

$77.10
+2.50 (+3.35%)

Growth Price

$10.28
Overvalued by 86.67%

Stability Price

$6.12
Overvalued by 92.06%

Company Metrics

  • P/E 47.59
  • P/S 3.18
  • P/B 3
  • EPS 1.62
  • Cash ROIC 70.76%
  • Cash Ratio 5.28
  • Dividend 0 / 0%
  • Avg. Vol. 14,562.00
  • Shares 4.18M
  • Market Cap. 322.20M

Company Description

Nathan's Famous, Inc., together with its subsidiaries, engages in marketing Nathan's Famous brand, and selling products bearing the Nathan's Famous trademarks through various distribution channels in the United States and internationally. The company operates and franchises quick-service restaurant units that features Nathan's beef hot dogs, crinkle-cut french-fries, and other menu offerings under... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Hot Dog Recall: Nathan's Famous, Inc. (NATH) Branded Franks May Contain Metal ...
Investorplace.com - May 22, 2017
Last year, over 500 million Nathan's Famous hot dogs were sold, according to the company. Hot dog producers estimate that an average of 38 percent or $614 million of the total number of hot dogs are sold during this time, according to the hot dog trade ...
Nathan's Hot Dog Maker Issues Recall Over Metal Pieces - TheStreet.com
Nathan's Hot Dogs Have Been Recalled Due to Metal Objects Found Inside! - POPSUGAR
Barron's Picks And Pans: Harvey Stocks, Nathan's Famous And The End Of The Bull
Benzinga - Sep 3, 2017
See what to watch for from tech giants like Apple Inc. (NASDAQ: AAPL) and Alphabet Inc (NASDAQ: GOOGL). See whether so-called orphan stocks are worth seeking out, and how to prepare to take advantage of cheap stocks after any sell off.
Nathan's Announces Proposed Offering of Senior Secured Notes due 2025
PR Newswire (press release) - Oct 17, 2017
JERICHO, N.Y., Oct. 17, 2017 /PRNewswire/ -- Nathan's Famous, Inc. (NASDAQ: NATH) ("Nathan's") announced today that it intends to offer, subject to market and other conditions, $150.0 million aggregate principal amount of Senior Secured Notes due 2025 ...
Stock is down at $73.70 (NATH) Nathan's Announces Proposed Offering of… - HugoPress
Nathan's Famous Offers Tasty Growth at a Discount
Barron's - Sep 2, 2017
HOT DOG! At Nathan's Famous, which still has a stand on Coney Island, licensing is fueling juicy profit growth. Yet the stock, at a recent $58, is trading at a 40% to 45% discount to intrinsic asset value.
Breaking: Nathan's Famous Inc (NASDAQ:NATH) Stock Through Resistance ...
CML News - Oct 20, 2017
Breaking: Nathan's Famous Inc (NASDAQ:NATH) has hit maximum technical strength -- watch the technical oscillators for momentum gaps.
Nathan's Famous, Inc. (NASDAQ:NATH) Experiences Light Trading Volume - HugoPress
Nathan\'s Famous Inc. (NATH) Breaks into New 52-Week High on October 20 Session - Equities.com
Nathan's Famous revenue edges up, earnings fall
Newsday - Aug 4, 2017
Nathan's Famous Inc., the Jericho restaurant operator and hot dog maker, Friday reported that first quarter revenue edged higher, but net income fell 17.7 percent due in part to more favorable tax benefits in the year-earlier period.
Smithfield Foods Announces Nathan's Famous Partnership with Six Flags Theme Parks
GlobeNewswire (press release) - Apr 7, 2017
... the world's largest regional theme park company, announced this week a new multi-year marketing partnership and food service program with Nathan's Famous, Inc. The new agreement makes Nathan's Famous the “Official Hot Dog of Six Flags” across the ...
Nathan's Famous® Introduces Pre-Cooked, Quarter-Pound Steak Patties for ...
GlobeNewswire (press release) - Aug 30, 2017
JERICHO, N.Y., Aug. 30, 2017 (GLOBE NEWSWIRE) -- Nathan's Famous®, the iconic brand best known for its world-famous hot dogs, is expanding its product portfolio to grocery stores across the country with the introduction of Nathan's Famous Pre-Cooked, ...
Shedding Light on Nathan's Famous, Inc. (NasdaqGS:NATH)'s Quant Scorecard
Rockville Register - 11 hours ago
The Piotroski F-Score is a scoring system between 1-9 that determines a firm's financial strength. The score helps determine if a company's stock is valuable or not.
Nathan's Famous, Inc. (NASDAQ:NATH) Closed 8.3% Above Its 50 Day Average - First News 24
Magic Formula Update on Nathan's Famous, Inc. (NasdaqGS:NATH) - JCTY News
Nathan's Famous, Inc. (NASDAQ:NATH) Short Interest Down -5.18% – Shares ...
HugoPress - Oct 19, 2017
Short traders are more bullish on shares of Nathan's Famous, Inc. if you take note of the decrease in short interest.
Nathan's Famous, Inc. (NASDAQ:NATH) Short interest fell by -5.18% – Shares ... - Highlight Press
Nathan's Famous, Inc. (NASDAQ:NATH) Trading Down – Shorts Down -5.18% - Finance Daily
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for NATH to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate NATH's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$77.10 Current Price

$10.28 Growth Price (DCF)

Overvalued by 86.67%


Growth Rate Assumed by Market: 45.01%


Future Free Cash Flow Growth Rate: 15.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$6.12 Stability Price (EPV)

Overvalued by 92.06%


Discount Rate: 15.0%

$-36.16 Book Price

Overvalued by 146.90%


Varying Cash Return on Invested Capital over the past 5 years

NATH has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. However, there is a substantial variation in their Cash ROIC from year-to-year. This company may have unreliable free cash flow or operates in a business where invested capital costs increase substantially on a sporadic basis. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

NATH has created $70.76 of cash for every $100 invested.
Figures in USD. Fiscal year ends in March
20132014201520162017
Free Cash Flow 8.50M -1.46M 11.75M 11.36M 9.28M
divided by
Invested Capital 10.49M 13.06M 14.17M 10.12M 10.44M
Cash ROIC 81.00% -11.20% 82.88% 112.19% 88.94%

Poor Return on Equity over the past 5 years

NATH has shown an inability to deliver strong results for shareholders. This could be due to poor management, NATH operating in a highly competitive industry, or having a weak business in general.

NATH has only generated $8.17 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in March
20132014201520162017
Net Income 7.47M 8.33M 11.70M 6.10M 7.49M
divided by
Stockholders' Equity 34.15M 43.90M -59.91M -72.34M -66.49M
Return on Equity 21.87% 18.97% - - -

Excellent Business Performance over the past 10 years

NATH has been able to maintain profitability in good times and bad. This could mean NATH has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

NATH has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in March
2008200920102011201220132014201520162017
Free Cash Flow 3.88M 3.59M 5.00M 5.98M 8.25M 8.50M -1.46M 11.75M 11.36M 9.28M

Very Weak Balance Sheet

NATH is in a poor financial position. This could be due to a slowdown in sales, indulging in debt-fuelled growth, or the nature of NATH's business. If it is highly capital intensive (see Economic Moat), they likely have to outlay significant capital just to stay competitive. This habit often destroys more value than it creates.
Figures in USD. Fiscal year ends in March
2008200920102011201220132014201520162017
Cash 35.33M 34.35M 35.93M 27.85M 20.74M 25.71M 33.26M 58.48M 50.23M 56.92M
Current Assets 42.78M 42.20M 43.82M 44.42M 35.55M 40.99M 45.19M 73.61M 60.98M 67.54M
Total Assets 51.20M 49.82M 53.37M 52.96M 44.52M 49.66M 56.14M 84.67M 71.55M 78.13M
Current Liabilities 7.13M 6.90M 7.16M 12.97M 13.56M 13.46M 9.81M 12.01M 11.20M 10.77M
Total Liabilities 8.59M 7.98M 9.06M 14.88M 15.68M 15.51M 12.24M 144.57M 143.89M 144.62M
Stockholder' Equity 42.61M 41.85M 44.31M 38.08M 28.84M 34.15M 43.90M -59.91M -72.34M -66.49M
Current Ratio 6.00 6.12 6.12 3.43 2.62 3.04 4.61 6.13 5.44 6.27
TL-to-TA 0.17 0.16 0.17 0.28 0.35 0.31 0.22 1.71 2.01 1.85

Consistent Reinvestment of Profits over the past 10 years

NATH has consistently retained profits. This may put NATH in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, NATH can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in March
2008200920102011201220132014201520162017
Retained Earnings 3.75M 11.23M 16.80M 19.01M 25.17M 32.64M 40.96M -63.44M -57.35M -49.86M
Retained Earnings Growth - 199.73% 49.60% 13.17% 32.39% 29.67% 25.51% -254.88% 9.61% 13.05%

Competitive Industry over the past 10 years

NATH is likely operating in an industry with medium to low barriers to entry. This may mean that NATH doesn't have a characteristic that's hard to replicate, such as exclusive distribution, branding or the ability to keep costs low. If Gross Margins are at least satisfactory, it's likely that NATH invests heavily in R&D and Sales, General & Administrative expenses.

Only $9.92 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in March
2008200920102011201220132014201520162017
Net Income 6.56M 7.48M 5.57M 2.21M 6.16M 7.47M 8.33M 11.70M 6.10M 7.49M
divided by
Revenue 47.40M 49.22M 50.88M 57.26M 66.22M 71.54M 82.93M 99.11M 100.89M 96.65M
Net Profit Margin 13.83% 15.20% 10.95% 3.87% 9.30% 10.44% 10.04% 11.81% 6.04% 7.74%

Varying Pricing Power over the past 10 years

NATH has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. However, there is a substantial variation in their Gross Profit Margins from year-to-year, which indicates inconsistent performance. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$44.91 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in March
2008200920102011201220132014201520162017
Gross Profit 20.33M 20.45M 22.36M 22.69M 66.22M 23.97M 26.71M 33.41M 39.34M 41.24M
divided by
Revenue 47.40M 49.22M 50.88M 57.26M 66.22M 71.54M 82.93M 99.11M 100.89M 96.65M
Gross Margin 42.88% 41.54% 43.96% 39.63% 100.00% 33.50% 32.21% 33.71% 38.99% 42.66%

Medium Capital Intensity over the past 10 years

NATH has used a reasonable amount of their financial resources to invest in facilities and equipment required to produce its goods and services. This isn't perfect, but it shouldn't be an area of concern unless this number is strongly trending upwards.

25.14% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in March
2008200920102011201220132014201520162017
Capital Expenditure 972,000.00 513,000.00 2.18M 1.25M 1.36M 998,000.00 4.34M 1.54M 1.13M 1.13M
divided by
Net Income 6.56M 7.48M 5.57M 2.21M 6.16M 7.47M 8.33M 11.70M 6.10M 7.49M
Capital Expenditure Ratio 14.83% 6.86% 39.22% 56.26% 22.05% 13.36% 52.11% 13.14% 18.45% 15.07%

No Dividend History over the past 10 years

NATH has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in March
2008200920102011201220132014201520162017
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 6.50M 6.18M 5.72M 5.50M 5.05M 4.59M 4.61M 4.59M 4.46M 4.21M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 12.11 15.27 16.73 21.02 33.65 50.69 80.00 50.81 64.90 69.05
Dividend Yield - - - - - - - - - -

Strong History of Stock Buybacks over the past 10 years

NATH has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in March
2008200920102011201220132014201520162017
Shares Outstanding 6.50M 6.18M 5.72M 5.50M 5.05M 4.59M 4.61M 4.59M 4.46M 4.21M
Stock Bought Back - 5.21% 8.12% 3.85% 9.01% 10.05% -0.37% 0.37% 2.80% 6.11%
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