Investment Thesis
Flanigan's Enterprises demonstrates stable revenue growth at 9.6% YoY with solid free cash flow generation ($4.5M), supported by healthy liquidity metrics and modest leverage. However, profitability deteriorated significantly with net income declining 37.2% YoY despite revenue expansion, indicating operational margin compression and execution challenges that require monitoring.
Strengths
- Strong revenue growth of 9.6% YoY in competitive restaurant retail sector
- Healthy free cash flow of $4.5M with 8.5% FCF margin demonstrates cash generation capability
- Conservative capital structure with Debt/Equity of 0.28x and manageable 3.2x interest coverage
- Adequate liquidity with 1.65x current ratio and $23M cash position providing operational flexibility
Risks
- Sharp net income decline of 37.2% YoY despite revenue growth signals margin compression and operational inefficiency
- Depressed profitability metrics with 1.5% net margin and 0.6% ROA indicate poor asset utilization
- Minimal earnings power with ROE of only 1.2% despite $66M equity base, suggesting value destruction
- Operating margin of only 3.2% provides limited buffer for cost pressures common in restaurant industry
Key Metrics to Watch
- Operating margin trend and cost structure management
- Net income recovery and net margin expansion
- Cash flow sustainability and capital allocation efficiency
- Same-store sales growth and unit-level economics
- Interest coverage maintenance given debt burden
Financial Metrics
Revenue
52.6M
Net Income
805.0K
EPS (Diluted)
$0.43
Free Cash Flow
4.5M
Total Assets
142.1M
Cash
23.0M
Profitability Ratios
Gross Margin
N/A
Operating Margin
3.2%
Net Margin
1.5%
ROE
1.2%
ROA
0.6%
FCF Margin
8.5%
Balance Sheet & Liquidity
Current Ratio
1.65x
Quick Ratio
1.29x
Debt/Equity
0.28x
Debt/Assets
43.8%
Interest Coverage
3.23x
Long-term Debt
18.7M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-03-20T20:46:10.813963 |
Data as of: 2025-12-27 |
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