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Category: Stock Market and Famous Dave's
Date: 20 September 2019 Stock Price: $4.68 We take a look at the 2nd quarter earnings release of their 2019 fiscal year of Famous Dave's a barbeque restaurant franchise group.
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About Famous Dave's
Famous Dave's of America opened its first Famous Dave’s restaurant in Minneapolis in June 1995. Folks were kind enough to keep askin’ for more, so we now own, operate and franchise restaurants out of our Minnetonka, Minnesota headquarters all over the U.S. Famous Dave’s does barbeque and we do it right, featuring our hickory-smoked barbequed meats and chicken. We sneak in a few salads and such, includin’ tasty beans and corn muffins, and desserts you can’t say “no” to. Famous Dave’s of America, through partnerships, has extended the brand into retail with a complete line of barbeque sauces, rubs and seasonings – all approved by that barbecue connoisseur himself, Famous Dave.
Famous Dave’s develops, owns, operates and franchises barbeque restaurants. Its menu features award-winning barbequed and grilled meats, a selection of salads, sandwiches, side items, and made-from-scratch desserts. As of August 12, 2019, the Company owns 33 locations and franchises an additional 101 restaurants in 33 states, the Commonwealth of Puerto Rico, Canada, and United Arab Emirates.
Famous Dave’s develops, owns, operates and franchises barbeque restaurants. Its menu features award-winning barbequed and grilled meats, a selection of salads, sandwiches, side items, and made-from-scratch desserts. As of August 12, 2019, the Company owns 33 locations and franchises an additional 101 restaurants in 33 states, the Commonwealth of Puerto Rico, Canada, and United Arab Emirates.
Overview of Hibbett Sports' latest earnings report
The numbers we are interested in (for the quarter):
- Revenue: $21.128 million (up from $14.538 million from the same quarter of the previous year)
- Revenue increased by 45.3% over the last 12 months
- Total costs and expenses: $19.651 million (up from $12.549 million for the same quarter of the previous year)
- Total cost and expenses increased by 55.8% over the last 12 months
- Net income: $1.040 million (down from $1.392 million loss for the same quarter of the previous year)
- Diluted earnings per share: $0.11 (down from $0.16 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 9.278 million (up from 8.835 million for the same quarter of the previous year)
- Cash and cash equivalents: $8.22 million
- Cash and cash equivalents per share: $0.89
- Cash and cash equivalents makes up 18.9% of Famous Dave's market capital
- Cash and cash equivalents makes up 12.49% of Famous Dave's total assets
- Accounts receivable: $4.470million
- Accounts receivable makes up 6.79% of Famous Dave's total assets
- Stockholders equity: $23.862 million
- Stockholders equity per share: $2.57
- Famous Dave's restaurants is trading at 1.82 times its stockholders equity per share
Famous Dave's management commentary on the results and earnings guidance
MINNEAPOLIS, Aug. 12, 2019 (GLOBE NEWSWIRE) -- Famous Dave's of America, Inc. (NASDAQ: DAVE), an innovating owner and operator of barbeque restaurants, globally, today reported financial results for the second fiscal quarter ended June 30, 2019.
Jeff Crivello, CEO, commented, “For the second time since 2011, our franchise community posted positive same store net sales, driven by a 0.7% increase from domestic franchisees, partially offset by a 5.8% decline from our international community. During the first half of fiscal 2019, we have reinvested approximately $5.7 million into our system, including repurchasing franchise restaurants, and refreshes of company owned restaurants. In addition, we refinanced our credit facility in preparation of our growth initiatives. We have also begun the process to open new, small footprint restaurants in select markets.”
Second Quarter 2019 Highlights:
Highlights Subsequent to the Second Quarter 2019:
Jeff Crivello, CEO, commented, “For the second time since 2011, our franchise community posted positive same store net sales, driven by a 0.7% increase from domestic franchisees, partially offset by a 5.8% decline from our international community. During the first half of fiscal 2019, we have reinvested approximately $5.7 million into our system, including repurchasing franchise restaurants, and refreshes of company owned restaurants. In addition, we refinanced our credit facility in preparation of our growth initiatives. We have also begun the process to open new, small footprint restaurants in select markets.”
Second Quarter 2019 Highlights:
- Company-owned same store net sales decreased 0.8%, driven by traffic decreases in Dine-In, partially offset by a 6.8% increase in To-Go same store net sales.
- Domestic franchise-operated same store net sales increased 0.7% year-over-year. Franchise-operated system, including international units, increased by 0.5%.
- Reacquired eight Famous Dave’s franchise stores at attractive valuations, which are slated for upgrades and relaunches.
- Generated over $800,000 in operating cash flow.
- Launched 2,300 square foot small-footprint restaurant in Tucson, Arizona through a Famous Dave’s franchisee.
- Approximately 102,000 downloads of loyalty app since it was launched in December 2018.
Highlights Subsequent to the Second Quarter 2019:
- Reacquired five restaurants in Arizona and Kentucky from franchisees.
- Announced agreement with Beyond Meat to add innovative and delicious non-meat items to the Famous Dave’s menu.
Famous Dave's (NASDAQ:DAVE) stock price history
The image below, obtained from Google, shows the stock price history of Famous Dave's (NASDAQ: DAVE) over the last 5 years. And it has not been a very good time for Famous Dave's stockholders. 5 years ago the stock of Famous Dave's was trading around $18.60 and its currently trading at $4.68. That's a massive decline of -74.8% over the last 5 years. The stock is trading at close to the mid point between its 52 week high and its 52 week low, which is an indication that short term sentiment and momentum of the stock is relatively neutral. And this can be seen with the mostly sideways movement of the stock in recent months.
Famous Dave's (NASDAQ: DAVE) latest stock valuation
So based on the earnings report of Famous Dave's (NASDAQ:DAVE) and the latest earnings guidance provided what do we value Famous Dave's (DAVE) stock at? Based on this the group our target (full value) price for Famous Dave's at $7.10 a stock. We therefore believe the stock of Famous Dave's is undervalued
We usually suggest long term fundamental and value investors look to enter the stock at least 10% below our target price, which in this case is $7.10 Therefore we believe the a good entry point into the stock is below $6.40, and the stock is trading at well below this level right now. We therefore expect Famous Dave's (DAVE) stock price to tick upwards to levels closer to our target (full value) price in coming weeks and months.
We usually suggest long term fundamental and value investors look to enter the stock at least 10% below our target price, which in this case is $7.10 Therefore we believe the a good entry point into the stock is below $6.40, and the stock is trading at well below this level right now. We therefore expect Famous Dave's (DAVE) stock price to tick upwards to levels closer to our target (full value) price in coming weeks and months.