Investment Thesis
Noodles & Co exhibits severe financial distress with negative stockholders' equity (-$48M), indicating balance sheet insolvency, combined with unprofitable operations (net margin -2.8%) and a liquidity crisis (current ratio 0.28x). While operating cash flow remains positive, the company cannot cover interest expenses and possesses only $1.4M in cash against $294.4M in liabilities, creating acute financial risk.
Strengths
- Positive operating cash flow ($6.0M) providing short-term flexibility
- Positive free cash flow ($3.9M) despite operating losses
- Stable revenue base ($123.8M) in established quick-service restaurant sector
Risks
- Negative stockholders' equity of -$48M indicating balance sheet insolvency
- Critical liquidity crisis with current ratio of 0.28x and quick ratio of 0.13x
- Unprofitable operations with negative net income (-$3.4M) declining 17.5% YoY
- Unable to cover interest obligations with negative interest coverage ratio
- Minimal cash reserves ($1.4M) insufficient for $294.4M liability obligations
- High leverage with $105.6M long-term debt relative to negative equity
Key Metrics to Watch
- Operating cash flow sustainability and burn rate
- Debt covenant compliance and refinancing risk
- Path to profitability and operating margin improvement
- Revenue growth acceleration beyond current 0.4% YoY
- Cash balance changes and working capital management
Financial Metrics
Revenue
123.8M
Net Income
-3.4M
EPS (Diluted)
$-0.58
Free Cash Flow
3.9M
Total Assets
246.3M
Cash
1.4M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-0.7%
Net Margin
-2.8%
ROE
N/A
ROA
-1.4%
FCF Margin
3.2%
Balance Sheet & Liquidity
Current Ratio
0.28x
Quick Ratio
0.13x
Debt/Equity
N/A
Debt/Assets
119.5%
Interest Coverage
-0.13x
Long-term Debt
105.6M
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: 2026-05-08T11:31:29.329695 |
Data as of: 2026-03-31 |
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