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1. Company Snapshot

1.a. Company Description

Nathan's Famous, Inc., together with its subsidiaries, operates in the foodservice industry.The company owns and franchises restaurants under the Nathan's Famous brand name, as well as sells products bearing the Nathan's Famous trademarks through various channels of distribution.It also has license agreements for the manufacture, distribution, marketing, and sale of Nathan's Famous branded hot dogs, sausages, and corned beef products in refrigerated consumer packages to be resold through retail channels, such as supermarkets, groceries, mass merchandisers, and club stores; and other Nathan's Famous branded refrigerated meat products in consumer packages to be resold through retail channels.


In addition, the company has license agreements to manufacture Nathan's Famous branded hot dog and sausage products in bulk for use in the food service industry; for supplying Nathan's Famous natural casing and skinless hot dogs in bulk for use in the Nathan's Famous restaurant system; to manufacture proprietary spices; to produce and distribute sauerkraut and pickles; to produce and sell French fries and onion rings for retail sale; and to produce and sell miniature bagel dogs, franks-in-a-blanket, mozzarella sticks, and other hors d'oeuvres through club stores, supermarkets, and other retail food stores.Further, the company sells Nathan's products directly to foodservice operators or to various foodservice distributors, as well as provides Arthur Treacher's brand fish fillets.As of March 27, 2022, its restaurant system consisted of four company-owned units in the New York City metropolitan area; and 239 franchised units in 18 states and 12 foreign countries.


Nathan's Famous, Inc.was founded in 1916 and is based in Jericho, New York.

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1.b. Last Insights on NATH

Nathan's Famous, Inc.'s recent performance was driven by strong Q3 earnings, with revenue and profit growth driven by its branded product and licensing segments. The company's asset-light model, focusing on licensed products, ghost kitchens, and strategic partnerships, has reduced its reliance on traditional restaurant operations and improved its financial health. The partnership with John Morrell Food Group has significantly reduced long-term debt by 56% and boosted free cash flow. Revenue growth is driven by the Branded Products Program and licensing royalties, which account for 23% of total revenue.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Market Today: Alphabet rallies, Amazon's $50B AI push

Nov -24

Source: gurufocus.com

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First Look: BHP ends Anglo bid, Novo miss, Black Friday

Nov -24

Source: gurufocus.com

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Nathan's Famous Stock Declines as Q2 Earnings Reflect Softer Results

Nov -13

Source: zacks.com

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Nathan's Famous: Profits Cooling, Payouts Heating Up

Nov -08

Source: seekingalpha.com

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Nathan's Famous, Inc. Reports Second Quarter Results

Nov -06

Source: globenewswire.com

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Nathan's Famous Stock Gains 0.4% in Three Months: What's Next?

Sep -01

Source: zacks.com

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Nathan's Famous (NATH) Q1 Revenue Up 5%

Aug -08

Source: fool.com

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Nathan's (NATH) Q1 Revenue Rises 5%

Aug -08

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Branded Product Program

Expected Growth: 4.5%

Growing demand for co-branded food products, increasing popularity of Nathan's Famous brand, and expansion into new venues drive growth in the Branded Product Program.

Product Licensing

Expected Growth: 4.5%

Growing demand for branded food products, increasing popularity of co-branded offerings, and expansion into new markets drive the growth of Nathan's Famous product licensing segment.

Restaurant

Expected Growth: 4.5%

Nathan's Famous, Inc. is poised for growth driven by increasing demand for classic American fare, expansion into new markets, and strategic menu innovations. The brand's iconic hot dogs and nostalgic appeal will continue to attract customers, while its commitment to quality and customer experience will drive loyalty and retention.

Corporate

Expected Growth: 4.5%

Growing demand for convenience food, increasing popularity of quick-service restaurants, and expansion into new markets drive Nathan's Famous' growth. The company's iconic brand and strategic partnerships also contribute to its growth prospects.

7. Detailed Products

Nathan's Famous Hot Dogs

Nathan's Famous Hot Dogs are a classic American-style hot dog made with 100% beef and a natural casing, giving them a snap when bitten into.

Nathan's Angus Beef Franks

Nathan's Angus Beef Franks are made with premium Angus beef and a natural casing, offering a more premium hot dog experience.

Nathan's Skinless Beef Franks

Nathan's Skinless Beef Franks are a skinless version of the classic hot dog, made with 100% beef and no artificial flavors or by-products.

Nathan's Gourmet Hot Dogs

Nathan's Gourmet Hot Dogs offer unique flavor profiles such as Cheddar Cheese, Bacon, and Chili Cheese, made with premium ingredients.

Nathan's Corn Dogs

Nathan's Corn Dogs are a classic fair favorite, featuring a hot dog coated in a crispy layer of cornmeal batter.

Nathan's Burgers

Nathan's Burgers are made with 100% beef and offer a classic burger experience with a variety of toppings and condiments.

8. Nathan's Famous, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Nathan's Famous, Inc. has a moderate threat of substitutes due to the presence of alternative fast-food chains and restaurants that offer similar products.

Bargaining Power Of Customers

Nathan's Famous, Inc. has a low bargaining power of customers due to the fragmented nature of the market and the lack of concentration of buyers.

Bargaining Power Of Suppliers

Nathan's Famous, Inc. has a moderate bargaining power of suppliers due to the presence of multiple suppliers of raw materials and ingredients.

Threat Of New Entrants

Nathan's Famous, Inc. has a high threat of new entrants due to the relatively low barriers to entry in the fast-food industry and the attractiveness of the market.

Intensity Of Rivalry

Nathan's Famous, Inc. operates in a highly competitive market with intense rivalry among established players, which increases the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 206.93%
Debt Cost 5.25%
Equity Weight -106.93%
Equity Cost 5.25%
WACC 5.25%
Leverage -193.52%

11. Quality Control: Nathan's Famous, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Nathan's Famous

A-Score: 6.4/10

Value: 4.9

Growth: 6.6

Quality: 7.0

Yield: 4.0

Momentum: 9.0

Volatility: 7.0

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Value: 5.3

Growth: 5.0

Quality: 6.6

Yield: 4.0

Momentum: 8.5

Volatility: 6.3

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A-Score: 5.6/10

Value: 8.8

Growth: 3.3

Quality: 5.1

Yield: 9.0

Momentum: 3.0

Volatility: 4.3

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FAT Brands

A-Score: 5.3/10

Value: 10.0

Growth: 3.3

Quality: 5.6

Yield: 10.0

Momentum: 0.0

Volatility: 2.7

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Papa John's

A-Score: 4.9/10

Value: 5.7

Growth: 4.6

Quality: 4.5

Yield: 6.0

Momentum: 4.5

Volatility: 4.0

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El Pollo Loco

A-Score: 4.3/10

Value: 7.0

Growth: 4.7

Quality: 4.0

Yield: 3.0

Momentum: 1.0

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

89.61$

Current Price

89.61$

Potential

-0.00%

Expected Cash-Flows