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Category: Stock Market and Noodles & Co (NDLS)
Date: 8 August 2020 Stock Price of Noodles & Co: $7.43 We take a look at the 2nd quarter 2020 earnings report of Noodles & Company (NDLS) a quick serve pasta and noodle restaurant franchise group with 456 outlets across the United States. The group saw 2nd quarter revenue decline by -33.3% and they reported a loss of -$13.47 million compared to the same quarter of the previous year.
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Our second quarter saw a consistent sales recovery led by the strength and evolution of our digital and off-premise business, and I’m pleased to report that the recovery has continued into the third quarter - Dave Boennighausen, Chief Executive Officer of Noodles & Company."
About Noodles & Company (NDLS)
Noodles & Company opened its first restaurant in Denver, Colorado in 1995, offering noodle and pasta dishes with the goal of delivering fresh ingredients and flavors from around the world under one roof -from Pad Thai to Mac & Cheese.
The brand was founded on the core principle that good food can be served quickly and conveniently in an inviting atmosphere without sacrificing quality, freshness or flavor, all at a value-oriented price point and no tip! Today, Noodles & Company delivers on that core principle across hundreds of restaurants and in dozens of states in the U.S. every bowl, every guest, every time.
The brand was founded on the core principle that good food can be served quickly and conveniently in an inviting atmosphere without sacrificing quality, freshness or flavor, all at a value-oriented price point and no tip! Today, Noodles & Company delivers on that core principle across hundreds of restaurants and in dozens of states in the U.S. every bowl, every guest, every time.
Overview of Noodles & Co 2nd quarter 2020 earnings release
The data below refers to the latest quarter unless specified otherwise
- Revenue: $80.157 million (up from $120.190 million for the same quarter of the previous year)
- Revenue decreased by -33.3% over the last 12 months
- Cost of sales: $92.682 million (down from $120.190 million for the same quarter of the previous year)
- Cost of sales decreased by -22.1% over the last 12 months.
- Margin squeeze being experienced by Noodle & Co as the group's revenues decreased at a faster rate than their cost of sales
- Net loss: -$13.47 million (down from $438 thousand for the same quarter of the previous year)
- Diluted loss per share: -$0.30 (down from $0.01 for the same quarter of the previous year)
- PE ratio of Noodle & Co: Since the group is currently loss making a PE ratio cannot be calculated
- Diluted weighted number of shares outstanding: 44.212 million (down from 45.075 million for the same quarter of the previous year)
- Stockholders equity in Noodle & Co: $32.276 million
- Stockholders equity per share in Noodle & Co: $0.73
- So Noodle & Co is trading at 10 times its stockholders equity per share which is just outside the expected range of between 2 and 4 times that most firms tend to trade at
- For some perspective the average price to book value of firms in the S&P 500 is 3.7
Noodles & Company (NDLS) management commentary on 2nd quarter 2020 earnings
BROOMFIELD, Colo., Aug. 06, 2020 (GLOBE NEWSWIRE) -- Noodles & Company (Nasdaq: NDLS) today announced financial results for its second quarter ended June 30, 2020.
“Our second quarter saw a consistent sales recovery led by the strength and evolution of our digital and off-premise business, and I’m pleased to report that the recovery has continued into the third quarter,” said Dave Boennighausen, Chief Executive Officer of Noodles & Company. “In addition, average unit volumes, normalized for the impact of temporary closures, were nearly flat year-over-year during the recently completed July fiscal period. This continued improvement, coupled with the potential to utilize a smaller, off-premise focused footprint to take advantage of a more favorable real estate environment, gives me great confidence in the Company’s ability to continue to gain momentum through the balance of 2020 and accelerate new unit growth in the years to come.”
“Our second quarter saw a consistent sales recovery led by the strength and evolution of our digital and off-premise business, and I’m pleased to report that the recovery has continued into the third quarter,” said Dave Boennighausen, Chief Executive Officer of Noodles & Company. “In addition, average unit volumes, normalized for the impact of temporary closures, were nearly flat year-over-year during the recently completed July fiscal period. This continued improvement, coupled with the potential to utilize a smaller, off-premise focused footprint to take advantage of a more favorable real estate environment, gives me great confidence in the Company’s ability to continue to gain momentum through the balance of 2020 and accelerate new unit growth in the years to come.”
Boennighausen added, “I am extremely proud of all of our team members and partners for the progress we have made since the onset of the COVID-19 pandemic. The Company’s competitive strengths in our people, off-premise resonance and the variety inherent in our menu - from our world famous Mac & Cheese to healthy Zoodle and Caulifloodle offerings - have positioned Noodles & Company to successfully navigate this challenging environment and thrive in the coming years.”
Company-owned restaurants were closed July 4th and 5th 2020 in appreciation of our teams’ efforts during the pandemic. All restaurants were open during that time frame in 2019, negatively impacting comparable restaurant sales during the same period in 2020
Company-owned restaurants were closed July 4th and 5th 2020 in appreciation of our teams’ efforts during the pandemic. All restaurants were open during that time frame in 2019, negatively impacting comparable restaurant sales during the same period in 2020
Noodles & Company (NDLS) stock price history
The image below obtained from Google, shows the stock price history of Noodles & Company for the last 5 years. Its been not been a good time for Noodles & Company stockholders over the last 5 years. 5 years ago the stock of Noodles was trading at $12.70 odd and its currently trading at $7.43 a stock. That's a loss of -41.4% suffered by Noodles & Co stockholders over the last 5 years.
Noodles & Co stock is trading at a lot closer to its 52 week high of $9.06 than it is to its 52 week low of $3.14 which to us is a clear indication that the short term sentiment and momentum of Noodles & Co stock is positive at this point in time.
Noodles & Co stock is trading at a lot closer to its 52 week high of $9.06 than it is to its 52 week low of $3.14 which to us is a clear indication that the short term sentiment and momentum of Noodles & Co stock is positive at this point in time.
Noodle & Co (NDLS) vs Mcdonalds (MCD) performance over the last 5 years
The image below shows the stock price history of Noodles & Co and Mcdonalds over the last 5 years. Both firms are active in the quick service food industry. One is arguably the best known quick service food restaurant and the other a far lesser known:
The stock of Mcdonalds (MCD) has easily outperformed that of Noodle & Co (NDLS)
- Mcdonalds (MCD): 113.10%
- Noodles & Co: -41.4%
The stock of Mcdonalds (MCD) has easily outperformed that of Noodle & Co (NDLS)
Recent coverage of Noodles & Co
The extract below covers the latest regarding Noodles & Co as obtained from Fool.com
Fast-casual restaurant chain Noodles & Company (NASDAQ:NDLS) was one of the hottest IPOs in 2013. The stock priced at $18 per share but doubled in value its first day on the stock market.Investors were initially comfortable giving the company a $1.2 billion valuation, hoping for stellar returns as the company expanded to 2,000 locations long-term.
It's been a disastrous investment. Noodles & Company stock peaked around $50 per share in 2013. Today it wallows around $6 per share. Granted, it's nearly doubled from lows hit in March. But after seven years, it's still down 67% from where its IPO priced, and it's down 84% from where shares started trading.
Read the full article here
Fast-casual restaurant chain Noodles & Company (NASDAQ:NDLS) was one of the hottest IPOs in 2013. The stock priced at $18 per share but doubled in value its first day on the stock market.Investors were initially comfortable giving the company a $1.2 billion valuation, hoping for stellar returns as the company expanded to 2,000 locations long-term.
It's been a disastrous investment. Noodles & Company stock peaked around $50 per share in 2013. Today it wallows around $6 per share. Granted, it's nearly doubled from lows hit in March. But after seven years, it's still down 67% from where its IPO priced, and it's down 84% from where shares started trading.
Read the full article here
Noodles & Co (NDLS) stock valuation
So what do we value Noodle & Co (NDLS) stock is worth after their latest earnings report? Based on their 2nd quarter 2020 earnings report our valuation model provides a target price (full value price) for Noodle & Co stock at $6.90 a stock
We therefore believe the stock of Noodle & Co is close to being fully valued at its current price.
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $6.90. A good entry point into Noodle & Co would therefore be at $6.20 or below. We expect the stock of Noodle & Co to trade around its current price in coming weeks and months as the Covid-19 pandemic drags on.
We therefore believe the stock of Noodle & Co is close to being fully valued at its current price.
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $6.90. A good entry point into Noodle & Co would therefore be at $6.20 or below. We expect the stock of Noodle & Co to trade around its current price in coming weeks and months as the Covid-19 pandemic drags on.
Next earnings release of Noodles & Co
It is expected that Walmart will release their 2nd quarter 2021 earnings report towards the end of August 2020