Investment Thesis
Kura Sushi demonstrates strong revenue growth (+18.9% YoY) but remains unprofitable with negative free cash flow (-21.2M), indicating the company is burning cash despite expansion efforts. While the balance sheet remains healthy with positive equity and minimal debt, the inability to convert growing revenue into positive net income and the outflow of capital raises sustainability concerns.
Strengths
- Strong top-line growth of 18.9% YoY demonstrates market demand and expansion momentum
- Healthy balance sheet with positive stockholders equity of 228.8M and debt-free capital structure
- Solid liquidity ratios (Current: 1.46x, Quick: 1.40x) and positive operating cash flow of 8.1M
Risks
- Negative free cash flow of -21.2M indicates the company is burning cash despite revenue growth; capex (29.3M) far exceeds operating cash flow (8.1M)
- Unprofitable operations across all profitability metrics: net margin -3.1%, operating margin -3.8%, negative ROE and ROA
- Inability to achieve profitability despite significant revenue base of 153.5M suggests operational challenges in cost structure or execution
Key Metrics to Watch
- Path to operating profitability and positive net income margins
- Free cash flow trajectory and capital expenditure efficiency
- Unit economics and same-store sales growth to validate expansion ROI
Financial Metrics
Revenue
153.5M
Net Income
-4.8M
EPS (Diluted)
$-0.39
Free Cash Flow
-21.2M
Total Assets
461.0M
Cash
26.6M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-3.8%
Net Margin
-3.1%
ROE
-2.1%
ROA
-1.0%
FCF Margin
-13.8%
Balance Sheet & Liquidity
Current Ratio
1.46x
Quick Ratio
1.40x
Debt/Equity
0.00x
Debt/Assets
50.4%
Interest Coverage
-179.03x
Long-term Debt
N/A
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: 2026-04-12T06:18:21.399161 |
Data as of: 2026-02-28 |
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