Revenue Performance - Total GAAP revenues increased 152.3% to $194.0 million from $76.9 million[1] - Total revenues for the nine months ended September 30, 2024, reached $451,464, up from $242,833 in the prior year, indicating a growth of approximately 86%[6] - The company reported GAAP revenues of $193,975,000 for the three months ended September 30, 2024, compared to $76,884,000 for the same period in 2023[10] - Management, license, franchise, and incentive fee revenue for the three months ended September 30, 2024, was $3,388,000, compared to $3,184,000 for the same period in 2023[10] Profitability Metrics - Restaurant Operating Profit increased 175.6% to $25.1 million from $9.1 million[1] - Adjusted EBITDA for the three months ended September 30, 2024, was $14,803,000, compared to $3,023,000 for the same period in 2023, indicating a substantial improvement in financial performance[12] - Restaurant Operating Profit for the nine months ended September 30, 2024, was $68,181 million, up from $33,919 million in 2023, representing a significant increase[16] - STK restaurant operating profit for the three months ended September 30, 2024, was $6,547 million, with a profit margin of 14.6%[17] - Benihana restaurant operating profit for the three months ended September 30, 2024, was $17,708 million, with a profit margin of 17.0%[17] Costs and Expenses - Total costs and expenses for the three months ended September 30, 2024, were $196,995, compared to $78,839 in the same period last year, reflecting an increase of 150%[6] - General and administrative expenses for the three months ended September 30, 2024, were $12,785 million, compared to $7,280 million in 2023, showing an increase in operational costs[16] - General and administrative expenses as a percentage of total revenues decreased to 6.6% for the three months ended September 30, 2024, from 9.5% in the prior year[7] - Transaction and exit costs for the nine months ended September 30, 2024, totaled $9,199 million, indicating significant restructuring expenses[19] - Transition and integration expenses for the three months ended September 30, 2024, were $6,274 million, reflecting ongoing integration efforts[19] Financial Position - Cash and short-term credit card receivables at the end of the quarter totaled $36.2 million, with $34.1 million available under the revolving credit facility[2] - Total current assets increased to $63,472 as of September 30, 2024, from $46,680 at December 31, 2023, showing a growth of approximately 36%[8] - Total liabilities rose to $753,928 as of September 30, 2024, compared to $249,885 at December 31, 2023, indicating a significant increase of about 202%[8] - Cash and cash equivalents increased to $28,185 as of September 30, 2024, from $21,047 at December 31, 2023, representing a growth of approximately 34%[8] Guidance and Future Plans - 2024 total GAAP revenue guidance set at $660 to $680 million[3] - Consolidated Adjusted EBITDA guidance for 2024 is $71 to $76 million[4] - Company plans to open five to six Company-owned locations annually while focusing on asset-light development[1] - The integration of Benihana and RA Sushi is progressing well, with synergies expected to enhance margins[1] - Company closed four RA Sushi locations in October to optimize the restaurant portfolio[2] Losses and Adjustments - The net loss attributable to The ONE Group Hospitality, Inc. for the three months ended September 30, 2024, was $(8,890), compared to a net loss of $(3,098) for the same period in 2023[6] - The company reported an operating loss of $(3,020) for the three months ended September 30, 2024, compared to an operating income of $4,368 for the same period in 2023[6] - Adjusted net loss income available to common stockholders for the three months ended September 30, 2024, was $(9,383) million, compared to $(2,977) million in 2023[19] - Adjusted net income per share for the three months ended September 30, 2024, was $(0.30), compared to $(0.09) in 2023, indicating a decline in profitability per share[19] Sales Performance - Comparable sales decreased 8.8%[1] - Same Store Sales for US STK Owned Restaurants decreased by 11.4% in Q1 2024 compared to Q1 2023, while US STK Managed Restaurants saw a decrease of 8.6% in the same period[11] - Total food and beverage sales at owned and managed units reached $222,869,000 for the three months ended September 30, 2024, compared to $102,213,000 for the same period in 2023, representing a significant increase[10] - For the nine months ended September 30, 2024, total food and beverage sales at owned and managed units were $533,592,000, up from $321,421,000 for the same period in 2023[10]

Core Viewpoint - One Group Hospitality Inc. is undergoing a significant transformation following its acquisition of Benihana, which is expected to enhance its market position in the high-energy dining sector and has not yet been fully reflected in its stock price [1][16]. Company Overview - One Group Hospitality is an international restaurant company focused on premium dining experiences, emphasizing unique and high-energy offerings beyond traditional food and beverage services [2]. Acquisition Details - The acquisition of Safflower Holdings Inc., the parent company of Benihana, was announced earlier this year, positioning One Group to leverage Benihana's iconic brand and experiential dining model [4][5]. - The total consideration for the acquisition was $365 million, with a transaction multiple of 5.2x Benihana's 2023 run rate adjusted EBITDA of approximately $70 million [5][6]. Financial Metrics Post-Acquisition - Following the acquisition, One Group's financial metrics have shown substantial growth, including a 138% increase in TTM system-wide revenue from $436 million to $1,039 million and a 163% increase in TTM adjusted EBITDA from $40 million to $105 million [7][8]. - The company's gross profit margin improved from 18.46% to 19.38%, and operating income surged over 500% year-over-year, from $2 million to $12.3 million [9][10]. Market Reaction and Valuation - Despite the positive financial performance, One Group's stock price has decreased by over 40% year-to-date, indicating a significant undervaluation relative to its growth and the goodwill from the acquisition, which is reported at $145 million [11][12]. - The company's market cap has fallen to below $120 million, despite substantial increases in revenue and earnings, suggesting a disconnect between market perception and actual performance [11][16]. Future Growth Potential - One Group has plans for further expansion, with new venue openings already in progress, which could enhance its total addressable market (TAM) significantly, expanding beyond 800 locations post-acquisition [5][6]. - The anticipated annual synergies from the acquisition are forecasted at $20 million for at least three years, which could further improve financial performance [5][6].

The ONE Group Hospitality, Inc. (STKS) came out with quarterly earnings of $0.08 per share, beating the Zacks Consensus Estimate of $0.06 per share. This compares to earnings of $0.06 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 33.33%. A quarter ago, it was expected that this company would post earnings of $0.02 per share when it actually produced a loss of $0.02, delivering a surprise of -200%. Over the last four quarter ...

Financial Performance - Total revenues increased by $89.1 million, or 106.8%, to $172.5 million for the three months ended June 30, 2024, compared to $83.4 million for the same period in 2023, primarily due to the Benihana Acquisition[72]. - Same store sales decreased by 7.0% in the second quarter of 2024 compared to the second quarter of 2023[72]. - Restaurant operating profit increased by $18.1 million, or 151.3%, to $30.0 million for the three months ended June 30, 2024, compared to $11.9 million for the same period in 2023[72]. - Total revenues increased by $91.6 million, or 55.2%, to $257.5 million for the six months ended June 30, 2024, compared to $165.9 million for the same period in 2023[72]. - Restaurant operating profit increased by $18.3 million to $43.1 million for the six months ended June 30, 2024, compared to $24.8 million for the same period in 2023[72]. - The operating income for the three months ended June 30, 2024, was $1.654 million, a decrease from $6.323 million in the same period of 2023[75]. - Net loss attributable to The ONE Group Hospitality, Inc. for the three months ended June 30, 2024, was $6.929 million, compared to a net income of $3.174 million in the same period of 2023[75]. - Owned restaurant net revenue for the six months ended June 30, 2024, reached $250.529 million, compared to $158.502 million in the same period of 2023, marking a 58% increase[75]. - Adjusted EBITDA for the three months ended June 30, 2024, was $23.940 million, compared to $8.532 million for the same period in 2023[81]. Costs and Expenses - Total costs and expenses for the three months ended June 30, 2024, were $170.840 million, up from $81.348 million in the same period of 2023, reflecting a rise of 109.4%[75]. - Owned restaurant cost of sales for the three months ended June 30, 2024, was 21.2% of total revenues, down from 24.0% in the same period of 2023[77]. - General and administrative expenses, including stock-based compensation, were 6.2% of total revenues for the three months ended June 30, 2024, compared to 9.6% in the same period of 2023[77]. - Cost of sales for owned restaurants increased by $16.5 million, or 43.4%, to $54.6 million for the six months ended June 30, 2024, primarily due to the acquisition of Benihana and RA Sushi[90]. - General and administrative costs rose by $2.7 million, or 17.3%, to $18.2 million for the six months ended June 30, 2024, attributed to increased headcount from the Benihana acquisition[90]. - Depreciation and amortization expense increased to $13.3 million for the six months ended June 30, 2024, compared to $7.2 million for the same period in 2023, mainly due to the acquisition of Benihana and RA Sushi[90]. - Transaction and exit costs amounted to $8.3 million for the six months ended June 30, 2024, primarily related to the Benihana acquisition[90]. Acquisition and Expansion - The Benihana Acquisition was completed for $365.0 million on May 1, 2024, which includes most of the Benihana restaurants and all RA Sushi restaurants in the U.S.[68]. - The acquisition of Benihana and RA Sushi restaurants contributed $88.7 million in revenues for the two-month period owned by the company[86]. - The company intends to open eight to eleven new venues in 2024[66]. - The company plans to continue focusing on market expansion and new product development to drive future growth[75]. - The company opened STK Washington DC in March 2024 and plans to open a RA Sushi in Plantation, FL in July 2024, contributing to its market expansion strategy[100]. - The company expects to open an additional four to five Company-owned restaurants over the next six months[94]. Financing and Cash Flow - A credit agreement was entered into providing a $350.0 million senior secured term loan facility and a $40.0 million senior secured revolving credit facility[70]. - Interest expense, net, for the three months ended June 30, 2024, was $7.865 million, compared to $1.642 million for the same period in 2023[80]. - Interest expense, net was $7.9 million for the three months ended June 30, 2024, compared to $1.6 million for the same period in 2023, due to borrowing $350.0 million for the Benihana acquisition[88]. - Net cash provided by operating activities was $6.6 million for the six months ended June 30, 2024, down from $13.1 million in the same period of 2023[100]. - Net cash used in investing activities was $403.5 million for the six months ended June 30, 2024, primarily due to the Benihana acquisition costing $368.6 million[100]. - Net cash used in financing activities for the six months ended June 30, 2024, was $408.8 million, consisting of net proceeds from borrowings ($333.8 million) and issuance of preferred stock and warrants ($138.9 million), partially offset by repayment of Goldman Sachs debt ($73.6 million)[100]. - As of June 30, 2024, the company had $32.8 million in cash and cash equivalents and $350.0 million in long-term debt[94]. Legal and Compliance - The company is subject to class action lawsuits related to compliance with labor laws, which may require significant management attention and financial resources[104]. - The company believes that accrual and disclosure for legal matters are adequately provided for in its consolidated financial statements[104]. - The company intends to exclude the acquired Benihana business from its assessment of internal controls over financial reporting for the year ended December 31, 2024[103]. - The company concluded that its disclosure controls and procedures were effective as of June 30, 2024[102]. - The company has implemented new processes and internal controls following the Benihana acquisition to enhance financial reporting[103].

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks. One stock to keep an eye on is The ONE Group Hospitality (STKS) . STKS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 9.27. This compares to it ...

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers. Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental ...

Core Viewpoint - The ONE Group Hospitality, Inc. (STKS) shows potential for significant upside, with a mean price target of $7.67 indicating a 47.5% increase from its current price of $5.20 [1] Price Targets and Estimates - The mean estimate consists of three short-term price targets with a standard deviation of $1.53, suggesting variability among analysts [2] - The lowest estimate of $6 indicates a 15.4% increase, while the highest estimate suggests a 73.1% surge to $9 [2] - A low standard deviation indicates a high degree of agreement among analysts regarding the stock's price movement [7] Earnings Estimates - Analysts are optimistic about STKS's earnings prospects, as indicated by a positive trend in earnings estimate revisions [4][9] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 112.5%, with no negative revisions [10] - STKS holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [11]

Momentum investing is essentially an exception to the idea of "buying low and selling high." Investors following this style of investing are usually not interested in betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time. Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth potent ...

Core Viewpoint - The article emphasizes the importance of value investing and highlights The ONE Group Hospitality (STKS) as a strong candidate for value investors due to its favorable valuation metrics and earnings outlook [1][2][7]. Company Overview - The ONE Group Hospitality (STKS) has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4]. - The stock is currently trading with a P/E ratio of 22.78, which is lower than the industry average P/E of 23.11 [4]. - STKS's Forward P/E has fluctuated between a high of 30.03 and a low of 7.41 over the past year, with a median of 10.88 [4]. Valuation Metrics - The P/S ratio for STKS is 0.52, compared to the industry average P/S of 0.86, suggesting it is undervalued based on sales performance [5]. - The P/CF ratio for STKS stands at 9.97, significantly lower than the industry average P/CF of 18.24, indicating strong cash flow relative to its valuation [6]. - Over the past 12 months, STKS's P/CF has ranged from a high of 10.98 to a low of 5.19, with a median of 8.86 [6]. Investment Potential - The combination of favorable valuation metrics and a strong earnings outlook positions The ONE Group Hospitality as one of the market's strongest value stocks [7].

The ONE Group Hospitality, Inc. (NASDAQ:STKS) Q1 2024 Earnings Conference Call May 7, 2024 4:30 PM ET Company Participants Tyler Loy - Chief Financial Officer Manny Hilario - President & Chief Executive Officer Conference Call Participants Jim Salera - Stephens Inc. Mark Smith - Lake Street Michael Symington - Wedbush Roger Lipton - Lipton Financial Operator Greetings, and welcome to The ONE Group First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief ...