December 3, 2015
|Avg. Volume (3 mo.)||155,117|
Income Statement Snapshot
Balance Sheet Snapshot
Chanticleer Holdings (“HOTR,” “Chanticleer,” or the “Company”), together with its subsidiaries, owns and operates restaurant brands in the U.S. and internationally. The Company is a franchisee owner of Hooters® restaurants in international markets including Australia, South Africa, and Europe, and two Hooters restaurants in the U.S. The Company also owns and operates Better Burger brands in the fast casual space, including American Burger Co., BGR the Burger Joint, BT's Burger Joint, and Little Big Burger, as well, healthy fast casual concept Just Fresh restaurants in the U.S.
HOTR trades at a P/S (ttm) of 0.61x and P/B (mrq) of 0.94x. This represents a significant discount to peer comps such as Shake Shack (SHAK), Habit Burger (HABT), and Good Times Restaurants (GTIM), which trade at an average P/S (ttm) of 2.35x and average P/B (mrq) of 3.80x. HOTR’s current multiples represent discounts of 75% to the average P/S and P/B multiples.
HOTR continues to grow rapidly. The Company is projecting a pro forma 2015 year end revenue run rate of $55.0 million, a significant increase over 3Q15 annualized revenue of $37.4 million. This growth is driven by same store sales growth, new franchises, and new store openings with strong economics. In addition to impressive top line growth, HOTR expects to drive further improvements in margins and EBITDA, driven by revenue growth and efficiencies based on economies of scale. Research analysts have an average price target of $5.05, representing upside of 363%.
- Growing rapidly in fast casual space; $34.5 billion market with 11% annual growth in 2014
- Four established Better Burger brands in fast casual space
- Acquiring established brands at attractive multiples
- Three Better Burger acquisitions year-to-date in 2015
- Most recently acquired Little Big Burger, with eight locations in Oregon
- Significant franchise opportunity in Better Burger Space, with 80+ franchises under development agreement
- Majority of cash from franchises will go directly to EBITDA and net income
- One of the leading Hooters Franchisees successfully bringing the iconic brand abroad, with franchise rights in the U.S. and multiple international markets
- 15 restaurants open; market opportunity for 50+ locations
- Rapid organic and acquisition growth has resulted in a current portfolio of 62 restaurants
- The Company recorded revenue growth of 262% in 2014 with 844% growth in restaurant adjusted EBITDA
- Strong management team; CEO of Hooters on HOTR Board of Directors, new COO with strong public company experience, and burger business President who was previously instrumental in growing Bojangles (NASDAQ: BOJA, MC - $616M)