SONC  Sonic Corp.

Exchange

NASDAQ

Sector

Consumer Services

Industry

Restaurants

Market Cap.

1.04B

Vuru Grade

52.92/100

Current Price

$25.22
+0.10 (+0.40%)

Growth Price

$14.49
Overvalued by 42.54%

Company Metrics

  • P/E 17.39
  • P/S 2.17
  • P/B 92.26
  • EPS 1.45
  • Cash ROIC 11.78%
  • Cash Ratio 0.97
  • Dividend 0.56 / 2.19%
  • Avg. Vol. 835,048.00
  • Shares 49.67M
  • Market Cap. 1.04B

Company Description

Sonic Corp. operates and franchises a chain of quick-service drive-in restaurants in the United States. As of June 22, 2011, it operated and franchised approximately 3,500 drive-ins. It also leases signs and real estate. The company was founded in 1953 and is headquartered in Oklahoma City, Oklahoma.... more


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

News

Sonic Drive-In confirms credit card investigation
FOX31 Denver - Sep 27, 2017
OKLAHOMA CITY, Okla. - Sonic Corporation has confirmed to the Chicago Tribune, that the restaurant chain is investigating “unusual activity” on credit cards used at their locations.
Sonic Drive-In Credit-Card Breach: What to Do - Tom's Guide
Sonic Data Breach: Millions of Stolen Credit, Debit Cards Being Sold Online - Investorplace.com
3 Stocks to Watch on Tuesday: Celanese Corporation (CE), IDEX Corporation (IEX ...
Yahoo Finance - Oct 17, 2017
Several companies reported on their latest quarters Monday, including IDEX Corporation (NYSE:IEX), Celanese Corporation (NYSE:CE) and Sonic Corporation (NASDAQ:SONC). Here's what you should know: InvestorPlace - Stock Market News, Stock ...
EPS for Sonic Corporation (SONC) Expected At $0.43 - BZ Weekly
Swing Trading Earnings Bullish Momentum With Options in Sonic Corp.
CML News - 10 hours ago
There is a pattern of bullish momentum in Sonic Corp. (NASDAQ:SONC) stock just days before earnings, and we can track that by looking at swing returns in the option market.
Sonic Corp. (SONC) Receiving Somewhat Positive News Coverage, Report Shows
The Ledger Gazette - 43 minutes ago
Sonic Corp. logo News stories about Sonic Corp. (NASDAQ:SONC) have been trending somewhat positive on Monday, Accern Sentiment reports.
Westwood Holdings Group Inc. Has $18.27 Million Stake in Sonic Corp. (NASDAQ:SONC)
TrueBlueTribune - 13 hours ago
Sonic Corp. logo Westwood Holdings Group Inc. boosted its stake in shares of Sonic Corp. (NASDAQ:SONC) by 24.2% during the second quarter, according to its most recent Form 13F filing with the SEC.
Sonic Corp. (SONC) Downgraded by Zacks Investment Research - StockNewsTimes
How Analysts Feel About Sonic Corporation (NASDAQ:SONC)? - WeeklyHub
Latest figures makes these Stock Even More Attractive: Sonic Corp. (SONC ...
StockNewsJournal - Oct 10, 2017
Sonic Corp. (NASDAQ:SONC) market capitalization at present is $1.01B at the rate of $24.03 a share. The firm's price-to-sales ratio was noted 0.00 in contrast with an overall industry average of 89.18.
Netflix, Sonic Corp, Celanese Corp and more - AFTER HOURS
Proactive Investors UK - Oct 17, 2017
US stocks hit new highs at the close and after the bell, Netflix Inc (NASDAQ:NFLX), the video streamer, was in the spotlight as expected.
What's Next for Sonic Corporation (SONC) After Forming Bearish Head ...
WeeklyHub - Oct 19, 2017
Investors sentiment increased to 0.94 in 2017 Q2. Its up 0.03, from 0.91 in 2017Q1. It improved, as 23 investors sold Sonic Corporation shares while 56 reduced holdings. 31 funds opened positions while 43 raised stakes. 47.84 million shares or 1.89 ...
Carrols Restaurant Group (TAST) and Sonic Corp. (SONC) Financial Contrast
Week Herald - 1 hour ago
Carrols Restaurant Group (NASDAQ: TAST) and Sonic Corp. (NASDAQ:SONC) are both small-cap retail/wholesale companies, but which is the better investment?
Sonic hit with class action suit over POS data breach
SC Magazine - Sep 28, 2017
Two Sonic Drive-In customers are taking legal action against Sonic for allowing their payment card data to possibly have been compromised when the fast-food chain's POS system was hacked and are demanding the company pay for credit monitoring ...
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for SONC 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 SONC'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.

$25.22 Current Price

$14.49 Growth Price (DCF)

Overvalued by 42.54%


Growth Rate Assumed by Market: 26.46%


Future Free Cash Flow Growth Rate: 14.2%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$-0.34 Book Price

Overvalued by 101.35%


Growing Cash Return on Invested Capital over the past 5 years

SONC has continued to efficiently invest its financial resources in buildings, projects, and equipment, resulting in increasingly stronger returns. Look at its Annual Reports to determine future sustainability.

SONC has created $11.78 of cash for every $100 invested.
Figures in USD. Fiscal year ends in August
20122013201420152016
Free Cash Flow 70.95M 46.50M 24.54M 94.21M 69.66M
divided by
Invested Capital 547.60M 509.97M 535.77M 505.01M 513.24M
Cash ROIC 12.96% 9.12% 4.58% 18.65% 13.57%

Varying Return on Equity over the past 5 years

SONC has generated strong profits with money shareholders have invested. However, there is a substantial variation in their Return on Equity from year-to-year. This may reflect management's inability to generate consistent returns or may be caused by one-time events. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

SONC has generated $110.93 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in August
20122013201420152016
Net Income 36.09M 36.70M 47.92M 64.49M 64.07M
divided by
Stockholders' Equity 59.25M 77.46M 62.68M 17.43M -75.64M
Return on Equity 60.91% 47.38% 76.45% 369.90% -

Excellent Business Performance over the past 10 years

SONC has been able to maintain profitability in good times and bad. This could mean SONC 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.

SONC has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in August
2007200820092010201120122013201420152016
Free Cash Flow 9.65M 21.72M 52.51M 53.14M 62.90M 70.95M 46.50M 24.54M 94.21M 69.66M

Very Weak Balance Sheet

SONC is in a poor financial position. This could be due to a slowdown in sales, indulging in debt-fuelled growth, or the nature of SONC'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 August
2007200820092010201120122013201420152016
Cash 38.95M 59.20M 137.60M 86.04M 29.51M 52.65M 77.90M 35.69M 27.19M 72.09M
Current Assets 73.70M 99.43M 202.13M 133.93M 93.46M 107.15M 140.72M 95.71M 85.44M 137.66M
Total Assets 758.52M 836.31M 849.04M 737.32M 679.74M 680.76M 660.79M 650.97M 620.02M 660.00M
Current Liabilities 114.49M 112.54M 117.32M 118.61M 71.28M 80.52M 72.93M 79.51M 87.82M 74.66M
Total Liabilities 865.32M 900.43M 853.31M 714.98M 628.05M 621.51M 583.33M 588.30M 602.59M 735.64M
Stockholder' Equity -106.80M -64.12M -4.27M 22.34M 51.70M 59.25M 77.46M 62.68M 17.43M -75.64M
Current Ratio 0.64 0.88 1.72 1.13 1.31 1.33 1.93 1.20 0.97 1.84
TL-to-TA 1.14 1.08 1.01 0.97 0.92 0.91 0.88 0.90 0.97 1.11

Consistent Reinvestment of Profits over the past 10 years

SONC has consistently retained profits. This may put SONC 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, SONC can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in August
2007200820092010201120122013201420152016
Retained Earnings 540.89M 599.96M 649.40M 670.49M 687.43M 722.61M 758.14M 801.20M 851.72M 894.44M
Retained Earnings Growth - 10.92% 8.24% 3.25% 2.53% 5.12% 4.92% 5.68% 6.30% 5.02%

Competitive Industry over the past 10 years

SONC is likely operating in an industry with medium to low barriers to entry. This may mean that SONC 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 SONC invests heavily in R&D and Sales, General & Administrative expenses.

Only $7.34 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in August
2007200820092010201120122013201420152016
Net Income 64.19M 60.32M 49.44M 21.21M 19.23M 36.09M 36.70M 47.92M 64.49M 64.07M
divided by
Revenue 770.47M 804.71M 718.79M 550.93M 545.95M 543.73M 542.59M 552.35M 606.09M 606.32M
Net Profit Margin 8.33% 7.50% 6.88% 3.85% 3.52% 6.64% 6.76% 8.67% 10.64% 10.57%

Satisfactory Pricing Power over the past 10 years

Consistency is vital. SONC has been able to maintain gross margins fairly consistently, which is a strong indication of their ability to raise prices with inflation. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$36.36 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in August
2007200820092010201120122013201420152016
Gross Profit 276.95M 256.61M 238.56M 196.27M 190.66M 196.26M 199.38M 210.24M 242.15M 249.50M
divided by
Revenue 770.47M 804.71M 718.79M 550.93M 545.95M 543.73M 542.59M 552.35M 606.09M 606.32M
Gross Margin 35.95% 31.89% 33.19% 35.62% 34.92% 36.10% 36.75% 38.06% 39.95% 41.15%

High Capital Intensity over the past 10 years

SONC spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

112.96% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in August
2007200820092010201120122013201420152016
Capital Expenditure 111.37M 105.43M 36.15M 24.47M 21.20M 24.18M 41.34M 79.01M 42.15M 46.55M
divided by
Net Income 64.19M 60.32M 49.44M 21.21M 19.23M 36.09M 36.70M 47.92M 64.49M 64.07M
Capital Expenditure Ratio 173.49% 174.78% 73.11% 115.37% 110.27% 66.99% 112.63% 164.89% 65.37% 72.66%

No Dividend History over the past 10 years

SONC has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in August
2007200820092010201120122013201420152016
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 70.54M 62.18M 61.24M 61.58M 61.94M 60.17M 57.19M 56.62M 53.95M 49.67M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 22.36 11.66 10.41 10.12 6.73 10.23 20.34 27.26 32.80 26.51
Dividend Yield - - - - - - - - - -

Strong History of Stock Buybacks over the past 10 years

SONC 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 August
2007200820092010201120122013201420152016
Shares Outstanding 70.54M 62.18M 61.24M 61.58M 61.94M 60.17M 57.19M 56.62M 53.95M 49.67M
Stock Bought Back - 13.44% 1.55% -0.55% -0.59% 2.94% 5.21% 1.01% 4.94% 8.63%
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