Nathans Famous (NATH) Stock

Nathan's Famous has successfully transitioned to an asset-light model, focusing on licensed products, ghost kitchens, and strategic partnerships, reducing its reliance on traditional restaurant operations. The company's partnership with John Morrell Food Group significantly improved its financial health, reducing long-term debt by 56% and boosting free cash flow. Revenue growth is driven by the Branded Products Program and licensing royalties, with the latter accounting for 23% of total revenue, despite challenges in franchised restaurants.

Strength in the majority of Nathan's Famous' segments drives its second-quarter fiscal 2025 performance.

Nathan's Famous: The Royalty Approach Is Underappreciated

Strength in the majority of Nathan's Famous' (NATH) segments drives its fiscal first-quarter performance.

Refinances Senior Secured Notes With A New Unsecured $60 Million Term Loan Facility and $10 Million Revolving Credit Facility and Declares Quarterly Cash Dividend Of $0.50 Per Share

Nathan's Famous has a strong brand and taste superiority in the hot dog industry, with corresponding premium pricing. The hot dog industry in the US is concentrated, with Nathan's being one of the top 5 brands and a potential acquisition target. Valuation analysis suggests over 50% upside potential for Nathan's stock with limited downside risk based on DCF analyses.

Nathan's Famous' (NATH) overall topline in fourth-quarter fiscal 2024 benefits from revenue growth in all segments.

Major League Eating will part ways with 16-time champion Joey Chestnut ahead of this year's annual Fourth of July hot dog eating contest, hosted by Nathan's Famous. The decision comes after Chestnut chose to represent a rival brand that sells plant-based hot dogs, the organization told CNBC in a statement.

Nathan's strong brand has allowed the company to maintain strong earnings power with little capital invested into the business. The value of the company depends on the growth of the high value royalty stream from its Product Licensing segment. If this segment grows, company earnings will grow with it. I estimate that Nathan's stock is undervalued by 30% even with little growth.