FAT Brands Inc., a franchising company, acquires, markets, and develops fast casual and casual dining restaurant concepts. As of November 29, 2017, it owned 5 restaurant brands, such as Fatburger, Buffalo's Cafe, Buffalo's Express, Ponderosa, and Bonanza Steakhouses that had approximately 300 locations open and 300 under development in 32 countries. The company was founded in 2017 and is based in Beverly Hills, California. FAT Brands Inc. is a subsidiary of Fog Cutter Capital Group Inc.
FAT Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for FAT, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Fat Brands Inc ranked in the 95th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. The most interesting components of our discounted cash flow analysis for Fat Brands Inc ended up being:
Interest coverage, a measure of earnings relative to interest payments, is 0.99 -- which is good for besting only 22.07% of its peer stocks (US stocks in the Consumer Cyclical sector with positive cash flow).
The company's compound free cash flow growth rate over the past 0.61 years comes in at 1.54%; that's greater than 95.49% of US stocks we're applying DCF forecasting to.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Cyclical that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as FAT, try LIVE, SNBR, ZXAIY, FCAU, and NVFY.