NDLS

Noodles & Company

Consumer


Presented:03/05/2021
Price:$10.94
Cap:$0.50B
Current Price:$1.17
Cap:$0.05B

Presented

Date03/05/2021
Price$10.94
Market Cap$0.50B
Ent Value$0.63B
P/E RatioN/A
Book Value$0.67
Div Yield0%
Shares O/S45.36M
Ave Daily Vol275,162
Short Int4.23%

Current

Price$1.17
Market Cap$0.05B
Noodles & Co. develops and operates fast-casual restaurants which offers lunch and dinner meals. It serves cooked-to-order dishes, which include noodles and pasta, soups, salads, sandwiches, and appetizers. The company was founded by Aaron Kennedy in 1995 and is headquartered in Broomfield, CO.

Publicly traded companies mentioned herein: Cracker Barrel Old Country Store Inc (CRBL), Noodles & Co (NDLS)

Highlights

The presenter is long shares of Noodles & Co (NDLS), a fast casual pasta concept with 454 locations (378 company-owned, 76 franchised) across 29 states. The company IPO’d at $18 per share in July 2013 when the fast casual trend was very popular, traded up to the mid-$40 range before the end of the year, then fell apart and has since been viewed as a broken growth story with a current share price of $10.50. He now sees it reverting to a growth story on the back of an inflection in unit growth, menu innovations, and a recent shareholder base inflection, all of which he considers underappreciated and underfollowed due to its <$500MM market cap. He sees a path for NDLS to grow EBITDA from $11.5MM in 2019 to $60MM in 2024 without even reaching management’s unit growth and margin expansion targets. Applying a 13x 2024 EBITDA multiple in line with CBRL, which he considers conservative given NDLS’s growth outlook, yields a 2023 year-end price target of $18 per share. In a bull case in which the management executives on their targets, he sees upside to a 17x EBITDA multiple and a share price of $32+. 

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