Latest news with #STKS
Yahoo
5 days ago
- Business
- Yahoo
Why The ONE Group (STKS) Stock Is Trading Lower Today
What Happened? Shares of upscale restaurant company The One Group Hospitality (NASDAQ:STKS) fell 11.1% in the afternoon session after the company reported disappointing second-quarter 2025 financial results that missed analyst expectations on both revenue and earnings. The upscale restaurant operator posted earnings per share of $0.05, which fell significantly short of the $0.09 consensus forecast. While total revenue grew 20.2% year-over-year to $207.4 million, it still missed estimates. A key point of concern for investors was a 4.1% decline in same-store sales, a metric that tracks performance at existing locations. The company's net loss also widened to $10.1 million from $7.3 million in the prior year, and it issued a weak revenue forecast for the next quarter, signaling potential challenges ahead. The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy The ONE Group? Access our full analysis report here, it's free. What Is The Market Telling Us The ONE Group's shares are extremely volatile and have had 55 moves greater than 5% over the last year. But moves this big are rare even for The ONE Group and indicate this news significantly impacted the market's perception of the business. The previous big move we wrote about was 13 days ago when the stock dropped 4.8% on the news that investment bank Piper Sandler initiated coverage on the stock with a "Neutral" rating. The initiation came with a price target of $6.00 per share. While this target suggested potential upside from recent trading levels, the lack of a strong bullish endorsement may have prompted a sell-off from investors who were hoping for a more positive catalyst. Adding to the negative sentiment, an insider, David Kanen, sold a significant number of shares in the preceding days, with transactions totaling over $1.5 million. This series of sales by a key insider likely increased investor concern ahead of the lukewarm analyst report. The ONE Group is down 4.9% since the beginning of the year, and at $2.69 per share, it is trading 47.6% below its 52-week high of $5.13 from July 2025. Investors who bought $1,000 worth of The ONE Group's shares 5 years ago would now be looking at an investment worth $1,949. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
5 days ago
- Business
- Globe and Mail
One Group (STKS) Q2 Revenue Rises 20%
Key Points GAAP revenue rose 20.2% year over year to $207.4 million in the quarter but missed analyst estimates. Comparable restaurant sales (non-GAAP) fell 4.1% as Profit margins (restaurant EBITDA as a percentage of company-owned STK revenue, non-GAAP) declined from 17.7% in Q1 2025 to 15.9% amid elevated costs. GAAP net loss widened to $10.1 million, while Adjusted EBITDA improved to $23.4 million. These 10 stocks could mint the next wave of millionaires › One Group Hospitality (NASDAQ:STKS), operator of upscale and experiential dining brands like STK and Benihana, reported financial results for Q2 2025 on August 5, 2025. The most significant development was a 20.2% jump in GAAP revenue, reaching $207.4 million, largely thanks to the Benihana acquisition. However, this figure fell short of analyst expectations of $208.9 million in GAAP revenue, and the company posted a diluted non-GAAP earnings per share (EPS) of $0.05. Comparable sales (non-GAAP) decreased 4.1%, and GAAP net loss widened from the year-ago period. Overall, results matched internal expectations but highlight ongoing margin and cost pressures as the firm integrates new brands and pursues asset-light growth. Metric Q2 2025 Q2 Estimate Q2 2024 Y/Y Change EPS, Diluted (Non-GAAP) $0.05 $0.09 $0.19 (73.7%) Revenue $207.4 million $208.9 million $172.5 million 20.2% Restaurant EBITDA $31.9 million $29.6 million 7.8% Adjusted EBITDA $23.4 million $21.8 million N/A Consolidated Comparable Sales (4.1%) (7.0%) 2.9 pp Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report. Business Overview and Strategic Focus One Group Hospitality operates restaurant concepts targeting upscale and casual dining, including STK, Benihana, Kona Grill, and RA Sushi. Its brands emphasize high-energy, social experiences—sometimes called "vibe dining"—that distinguish it from traditional chains. Over the last year, acquiring Safflower Holdings brought Benihana and RA Sushi under the corporate umbrella, making Benihana the leading revenue contributor. The company's core focus has been expanding its reach while controlling costs and capital expenditure. It aims to open five to seven new venues in 2025, combining company-owned and franchised sites under a 'capital-light' strategy. By increasing franchise and management arrangements, it seeks growth with less direct investment, entering new markets while minimizing risk. The emphasis remains on operational efficiency, customer experience, and scaling the loyalty program to build engagement and repeat visits. Quarterly Performance: Revenue, Costs, and Brand Results The quarter's standout figure was the significant GAAP revenue gain—a 20.2% increase driven by the integration of Benihana. Restaurant EBITDA—a measure of profit at the restaurant level before company-wide costs and one-time items—rose 8%, but Restaurant EBITDA margin (non-GAAP) declined to 15.7% from 17.5%. Adjusted EBITDA, which removes some one-time and integration-related expenses, edged up 7.3%. Results came just under analyst estimates, with GAAP revenue of $207.4 million, mainly because Comparable sales (non-GAAP) across existing locations decreased 4.1%. Comparable sales—a widely used metric showing sales performance at ongoing locations—were down 4.1% (non-GAAP). Breaking it down, Benihana saw positive 0.4% same-store sales growth (non-GAAP), while the core STK brand posted a 4.9% drop in same store sales and the grill concepts suffered a 14.6% fall in same store sales. STK did record a 2.8% increase in customer transactions, helped by value-driven menu strategies, such as midweek dining bundles and happy hour promotions. Grill concepts continue to face tough competition from heavy television advertising by larger chains. Cost pressures remained clear throughout the quarter. Operating expenses climbed to 84.7% of owned restaurant net revenue, up from 82.6% in Q2 2024. Restaurant operating costs grew as a share of net sales, hitting 63.5% versus 61.4% of owned restaurant net revenue for Q2 FY2025 and Q2 FY2024, respectively. General and administrative costs (GAAP) were $11.662 million. Interest expense (GAAP) was $10.295 million. as the company carried higher debt from its acquisitions. Lease exit costs and other one-time expenses, especially from shutting underperforming grill locations, also weighed on profitability—recorded at $5.6 million. At the balance sheet level, long-term debt (GAAP) was $327.5 million as of June 29, 2025, and the company had $15.1 million in available cash and credit card receivables. While it maintains enough liquidity and no current debt covenants, costs tied to the acquisition strategy are visible in both margin deterioration and in the GAAP net loss. The company executed only modest share buybacks, totaling $0.6 million. In terms of expansion, four new venues opened in the first half of FY2025, including owned Benihana restaurants and an STK relocation, plus the second franchised Benihana Express. Management, license, franchise and incentive fee revenue was $3.472 million. Management points to this segment as a key potential growth lever but acknowledges it will take time to ramp up. Finally, new customer initiatives included the soft launch of the Friends With Benefits loyalty program, which is being introduced across all brands, with emphasis on bringing in the casual brands first. Management reported that customer experience and execution in casual units meet internal standards, but that pricing remains deliberately constrained to drive repeat visits and recover market share rather than short-term margin improvement. Looking Ahead: Guidance and Key Watchpoints The company provided guidance for the next quarter, projecting total GAAP revenue of $190–$195 million, consolidated comparable sales (non-GAAP) between (4%) and (2%), and Adjusted EBITDA guidance of $15–$18 million. For FY2025, GAAP guidance is for revenue between $835 and $870 million and adjusted EBITDA in the $95–$115 million range. Five to seven new venues are expected for the full year, with most openings weighted to the back half of the year. No dividend is currently paid on common stock. Looking forward, investors will likely follow several evolving trends: progress in comparable sales (non-GAAP) recovery at Benihana and STK, margin development as integration efforts mature, and the ability to offset higher costs with operating efficiencies. Given the firm's high leverage and expansion plans, close attention to free cash flow, liquidity, and debt levels will also remain essential in the coming quarters. STKS does not currently pay a dividend. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 1,039%* — a market-crushing outperformance compared to 181% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. *Stock Advisor returns as of August 4, 2025
Yahoo
04-08-2025
- Business
- Yahoo
1 Small-Cap Stock with Exciting Potential and 2 Facing Headwinds
Many small-cap stocks have limited Wall Street coverage, giving savvy investors the chance to act before everyone else catches on. But the flip side is that these businesses have increased downside risk because they lack the scale and staying power of their larger competitors. Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here is one small-cap stock that could amplify your portfolio's returns and two best left ignored. Two Small-Cap Stocks to Sell: Sprinklr (CXM) Market Cap: $2.22 billion Initially focused only on social media management, Sprinklr (NYSE: CXM) is a leading provider of unified customer experience management software. Why Is CXM Risky? Offerings struggled to generate meaningful interest as its average billings growth of 4% over the last year did not impress Estimated sales growth of 3.4% for the next 12 months implies demand will slow from its three-year trend Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 3.6 percentage points Sprinklr's stock price of $8.59 implies a valuation ratio of 2.6x forward price-to-sales. To fully understand why you should be careful with CXM, check out our full research report (it's free). The ONE Group (STKS) Market Cap: $91.89 million Doubling as a hospitality services provider for hotels and resorts, The One Group Hospitality (NASDAQ:STKS) is an upscale restaurant company that operates STK Steakhouse and Kona Grill. Why Do We Think STKS Will Underperform? Poor same-store sales performance over the past two years indicates it's having trouble bringing new diners into its restaurants Earnings per share have dipped by 19.6% annually over the past five years, which is concerning because stock prices follow EPS over the long term 7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings The ONE Group is trading at $2.90 per share, or 0.9x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than STKS. One Small-Cap Stock to Watch: FTAI Infrastructure (FIP) Market Cap: $726.4 million Spun off from FTAI Aviation in 2021, FTAI Infrastructure (NASDAQ:FIP) invests in and operates infrastructure and related assets across the transportation and energy sectors. Why Are We Positive On FIP? Market share has increased this cycle as its 47.8% annual revenue growth over the last three years was exceptional Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 78.2% At $6.33 per share, FTAI Infrastructure trades at 2.7x forward EV-to-EBITDA. Is now a good time to buy? See for yourself in our in-depth research report, it's free. Stocks We Like Even More Donald Trump's April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities. The smart money is already positioning for the next leg up. Don't miss out on the recovery - check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
08-07-2025
- Business
- Yahoo
2 Small-Cap Stocks That Appear Ready to Surge (STKS, LGCY)
After a rather choppy start to the year, the broader market has firmed up significantly, as fears over geopolitical tensions and slowing economic growth begin to ease. With sentiment shifting back to 'risk-on,' selective small-cap stocks appear to offer exceptional upside opportunity from current levels, most notably those with strong growth forecasts, favorable valuations, and top Zacks Ranks. Two names in particular, The ONE Group Hospitality (STKS) and Legacy Education Inc. (LGCY), stand out as breakout candidates, each showing signs of building momentum ahead of potential major bull runs. Image Source: Zacks Investment Research The ONE Group Hospitality, operator of upscale restaurant brands like STK and Kona Grill, is benefiting from a renewed appetite for in-person dining. After years of volatility and pandemic-related challenges, it appears that 'peak takeout' has passed and consumers are returning to restaurants, especially experiential, high-energy venues like those operated by STKS. The company has recently flipped from negative to positive earnings, marking a significant inflection point. Analysts have responded with sharp upward revisions to estimates: earnings projections for the current year have jumped from a loss of -$0.31 to a gain of $0.51, while next year's forecast has risen from -$0.08 to $0.69. Not surprisingly, the stock boasts a Zacks Rank #1 (Strong Buy) rating. STKS trades at just 9.3x forward earnings, a compelling valuation for a company expected to grow EPS at a 20% annual clip over the next three to five years. Technically, the chart looks extremely promising. STKS has spent the beginning of the year building a solid base and has already broken out twice, forming a stair-step pattern higher. Currently, it appears to be carving out a bullish continuation pattern. As long as the stock holds above the $4.70 support level and clears resistance at $5.13, it could be poised for a powerful rally as the market re-rates this underappreciated small-cap growth story. Image Source: TradingView Legacy Education Inc. operates in the growing field of healthcare education and workforce development, with a focus on training programs for high-demand medical roles. As a provider of healthcare training, Legacy benefits from a steady stream of demand, even in slower economic cycles, making it a somewhat recession-resistant growth play. The company is showing strong momentum on both the earnings and technical front. It currently holds a Zacks Rank #2 (Buy) and trades at a reasonable 17.1x forward earnings, offering an appealing valuation for a business with this growth profile. Analysts expect sales to rise 37.9% this year and another 16.9% in 2026, reflecting very impressive growth expectations. I highlighted LGCY stock a couple of weeks ago, and it has since broken out to new record high prices. Following the breakout, it has begun to form a compelling technical bull flag, a continuation setup that, if confirmed with a move above the $11 level, could trigger another leg higher. Image Source: TradingView With the broader market returning to a risk-on footing and small-cap stocks starting to show signs of life, The ONE Group Hospitality and Legacy Education Inc. stand out as compelling opportunities. Both companies are backed by strong earnings growth forecasts, reasonable valuations, improving technical setups, and rising analyst sentiment. For investors looking to uncover under-the-radar growth stories with breakout potential, both of these small-cap names deserve a close look. If the charts confirm their next leg higher, STKS and LGCY could be among the early leaders in a broader small-cap resurgence. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Legacy Education Inc. (LGCY) : Free Stock Analysis Report The ONE Group Hospitality, Inc. (STKS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
11-06-2025
- Business
- Yahoo
STKS Q1 Earnings Call: Acquisition Integration Drives Growth Amid Shifting Consumer Trends
Upscale restaurant company The One Group Hospitality (NASDAQ:STKS) reported Q1 CY2025 results beating Wall Street's revenue expectations , with sales up 148% year on year to $211.1 million. Revenue guidance for the full year exceeded analysts' estimates, but next quarter's guidance of $207.5 million was less impressive, coming in 2.3% below expectations. Its non-GAAP profit of $0.14 per share was significantly above analysts' consensus estimates. Is now the time to buy STKS? Find out in our full research report (it's free). Revenue: $211.1 million vs analyst estimates of $203.4 million (148% year-on-year growth, 3.8% beat) Adjusted EPS: $0.14 vs analyst estimates of -$0.14 (significant beat) Adjusted EBITDA: $25.2 million vs analyst estimates of $24.51 million (11.9% margin, 2.8% beat) The company reconfirmed its revenue guidance for the full year of $852.5 million at the midpoint EBITDA guidance for the full year is $105 million at the midpoint, above analyst estimates of $102.7 million Operating Margin: 6.9%, up from 1.1% in the same quarter last year Same-Store Sales fell 3.2% year on year (-7.9% in the same quarter last year) Market Capitalization: $118 million The ONE Group's first quarter results reflected the full impact of its recently acquired Benihana and RA Sushi brands, which significantly expanded the company's revenue base. Management emphasized that positive comparable sales at Benihana and transaction growth at the flagship STK brand were key performance contributors, alongside operational efficiencies that improved restaurant-level margins. CEO Emanuel Hilario highlighted that cost synergies from integration efforts supported profit expansion, noting, 'We grew restaurant-level EBITDA to 16.4%, representing a 50-basis point improvement year over year through strategic operational efficiencies.' The company's new unit openings, particularly in California, further bolstered results by extending its presence in premium dining markets. Looking ahead, management's guidance is shaped by expectations for continued contributions from the Benihana integration, careful balancing of value-oriented offerings with premium positioning, and a strategic push into franchising. CEO Emanuel Hilario described a dual focus on expanding company-owned locations and accelerating asset-light growth through franchising, stating, 'We have discovered strong interest from franchisees seeking to enhance their portfolios with our established upscale and casual dining brand.' The company also plans to leverage its new loyalty program and digital marketing strategies to strengthen guest engagement, while remaining cautious about macroeconomic uncertainties, including consumer spending patterns and convention-driven demand fluctuations. Management attributed the quarter's growth to Benihana and RA Sushi's integration, increased operating efficiency, and targeted marketing, while acknowledging consumer shifts toward value and alternative dining times. Benihana and RA Sushi integration: The full-quarter performance of these newly acquired brands was a primary growth driver, contributing both higher sales and improved restaurant-level margins. Management credited operational synergies, such as unified reservation systems and consolidated purchasing, for enhancing profitability and efficiency across the portfolio. Shifting guest behavior: The company observed a trend toward value-oriented dining, with guests increasingly opting for happy hour offerings and sharing dishes, especially at STK. Management responded by introducing tiered pricing menus and midweek value-focused experiences to attract and retain traffic amid economic uncertainty. Marketing and loyalty initiatives: The soft launch of the Friends with Benefits rewards program aims to increase repeat visits and cross-brand engagement. CEO Emanuel Hilario highlighted the company's strategic use of its seven-million-member database and grassroots marketing to offset competitors' high-value TV promotions, particularly in the casual dining segment. Franchising momentum: The expansion of franchising infrastructure has led to heightened interest from potential partners, especially for Benihana Express concepts. Management is negotiating multiple development agreements and expects franchising to play a larger role in future growth, supported by dedicated internal resources and increased industry visibility. Labor and cost control: Wage inflation was described as moderate, and retention levels remained stable, particularly at STK and Benihana. The company continues to prioritize traffic and market share over aggressive pricing, opting for a conservative approach to price increases to sustain long-term growth. Management expects that Benihana's growing contribution, expanded franchising, and targeted marketing will drive results, but macroeconomic headwinds and evolving consumer preferences may limit near-term upside. Benihana's holiday and seasonal strength: Management believes Benihana will outperform during key holiday periods, especially in the second half of the year, based on learnings from last year's integration and efforts to optimize throughput during peak times. This is expected to help offset softer trends in other brands. Franchising and asset-light expansion: The company plans to accelerate its dual-track strategy, combining company-owned growth with a greater emphasis on managed and licensed venues. CEO Emanuel Hilario indicated that franchising could account for roughly half of Benihana's eventual U.S. footprint, and the company is actively negotiating development deals. Ongoing consumer and competitive pressures: Management cited unpredictable convention schedules, potential impacts from tariffs, and increased promotional activity by larger competitors as sources of risk. The company aims to mitigate these challenges through localized marketing, loyalty programs, and selective pricing adjustments. Looking forward, the StockStory team will be watching (1) the pace and quality of new unit openings and franchise deal signings, (2) signs of stabilization or improvement in same-store sales trends, particularly at legacy brands, and (3) evidence that marketing and loyalty initiatives are driving increased guest frequency. Execution in integrating Benihana and managing competitive pressures will also be important indicators. The ONE Group currently trades at a forward EV-to-EBITDA ratio of 1.1×. Should you double down or take your chips? See for yourself in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
