Shares of Noodles & Company (NDLS, Financial) fell by 17.49% as a result of disappointing third-quarter earnings. The company's key financial metrics, including revenue, EBITDA, and EPS, fell short of market expectations, leading to the stock price drop.
Currently, Noodles & Co (NDLS, Financial) is trading at $0.9901. The company has lowered its full-year revenue guidance, which has added to the bearish sentiment. The significant decrease in same-store sales by 3.3% and a notable 5.8% decline in customer traffic at company-owned restaurants have overshadowed any positive effects from price increases.
The financial health of Noodles & Co shows considerable warning signs. The company exhibits poor financial strength, highlighted by an Altman Z-score of 0.52, indicating potential distress. There is a noticeable trend of increasing long-term debt, with the company adding $41.184 million over the past three years. This has contributed to a negatively impacted book value growth of -72.8% in the last year.
From a valuation perspective, Noodles & Co (NDLS, Financial) could potentially be a value trap, as indicated by the GF Value which estimates the stock at $4.95. You can assess the GF Value for Noodles & Co for more insights. The current price-to-book ratio stands at 4.71, and the PS ratio is nearly at its 10-year low.
Despite the negative sentiment, there are a few positives. The stock price and PS ratio are close to their 10-year lows, suggesting potential value from a long-term perspective. Additionally, the Beneish M-Score indicates that Noodles & Co is unlikely to be manipulating its financials. However, investors should closely monitor the company's leverage and operational performance in the coming quarters.
