With the return of stock mania memeinternet food retailer Blue Apron Holdings, Inc. (APRN) is up 91.5% over the past month to close its last trading session at $5.65. The stock has a 43.03% short float. However, as with most meme actions, the sustainability of these gains is questionable.
Moreover, the recent APRN rally is not supported by fundamentals. For the fiscal second quarter ended June 30, APRN’s net loss increased 24.4% year-on-year to $23.12 million, while its net loss per share was 0.68 $.
Stock has a 12 month history DEER of a negative of 212.44%, which is significantly lower than the industry average of 12.32%. Moreover, analysts expect its EPS to remain negative at least until fiscal 2023.
By contrast, despite the challenges posed by rapidly rising consumer prices, Americans appear to have retained their appetite for dining out. The United States Census Bureau reported monthly food service and drinking place sales of $86.10 billion in Julyup 12% from July 2021. Additionally, the global restaurant market is expected to reach $4.43 trillion by 2028, registering a 9.9% CAGR growth.
We believe the restaurant is stocking Arcos Dorados Holdings Inc. (ARCO), Nathan’s Famous, Inc. (NAT) and Good Times Restaurants Inc. (GTIM) might be a better buy now than APRN.
Arcos Dorados Holdings Inc. (ARCO)
ARCO, based in Montevideo, Uruguay, operates as a franchisee of McDonald Corporation’s (MCD) Restaurants. The company holds the exclusive rights to own, operate and franchise MCD restaurants in 20 countries and territories.
For the fiscal second quarter ended June 30, ARCO’s total revenue increased 49.8% year-on-year to $887.90 million. Net income increased 192% from the prior year quarter to $14.58 million. Net earnings per common share improved 250% over the same period a year earlier to $0.07.
The consensus EPS estimate of $0.45 for fiscal 2022 indicates an 87.5% year-over-year increase. Similarly, the consensus revenue estimate for the same year at $3.36 billion reflects a 26.8% improvement over the prior year. Additionally, ARCO has an impressive surprise earnings history, as it has exceeded consensus EPS estimates in three of the past four quarters.
The stock has gained 35.5% over the past year and 33.6% since the start of the year to close its last trading session at $7.79.
ARCO’s solid fundamentals are reflected in its POWR Rankings. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
ARCO has a value rating of A and a growth and sentiment rating of B. In the 53 stocks Restaurants the industry, it is ranked #3.
Click here to see additional POWR ratings for ARCO (momentum, stability and quality).
Nathan’s Famous, Inc. (NAT)
NATH operates in the restaurant industry as the owner of franchise restaurants under the Nathan’s Famous brand. The Company also sells Nathan’s Famous branded products through various distribution channels.
Effective August 5, 2022, the company declared a quarterly dividend of $0.45 per share, payable to shareholders on September 22. The company also said it paid the regular dividend of $0.45 per share that was declared on June 10. This reflects the cash-generating capacity of the business.
NATH’s total revenue increased 26.8% year-on-year to $39.72 million in the fiscal first quarter ended June 26. Net earnings and earnings per share improved 23.8% and 24.3% from the prior year period to $7.14 million and $1.74.
Over the past three months, the stock has gained 34.5% to close its last trading session at $62.39. It has gained 11.6% over the past month.
It’s no surprise that NATH has an overall A rating, which translates to a strong buy in our POWR rating system.
NATH has an A rating for quality and a B rating for sentiment. It is ranked #2 in the restaurant industry.
To view additional POWR ratings for Growth, Value, Momentum and Stability for NATH, Click here.
Good Times Restaurants Inc. (GTIM)
GTIM owns and franchises the upscale fast-food drive-thru restaurant Good Times Burgers & Frozen Custard, and owns, operates, franchises and licenses the upscale casual full-service restaurant Bad Daddy’s Burger Bar.
On July 12, GTIM announced that same-store sales for its third quarter ended June 28 increased 1.6% for its Good Times brand over the prior year quarter and 5.3% for its Bad Daddy’s brand compared to the same quarter of the previous year.
For the third fiscal quarter ended June 28, GTIM’s total net revenue increased 7.5% year-on-year to $36.50 million. This can be attributed to a 7.6% increase over the year-ago quarter in restaurant sales to $36.27 million.
Shares of GTIM have gained 12.2% over the past three months to close its last trading session at $2.94.
This promising outlook is reflected in GTIM’s POWR ratings. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system.
GTIM has a value rating of A and a growth, momentum, sentiment and quality rating of B. It is ranked #1 in the same industry.
In addition to the POWR ratings we have given above, we can see GTIM’s rating for stability here.
ARCO shares were trading at $7.85 per share Thursday morning, up $0.06 (+0.77%). Year-to-date, ARCO has gained 36.13%, compared to a -11.83% rise in the benchmark S&P 500 over the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. After…