Stock Analysis

Should You Investigate FAT Brands Inc. (NASDAQ:FAT) At US$7.35?

  •  Updated
NasdaqCM:FAT
Source: Shutterstock

While FAT Brands Inc. (NASDAQ:FAT) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the NASDAQCM, rising to highs of US$9.90 and falling to the lows of US$7.15. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether FAT Brands' current trading price of US$7.35 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at FAT Brands’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for FAT Brands

Is FAT Brands Still Cheap?

Good news, investors! FAT Brands is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $9.51, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, FAT Brands’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of FAT Brands look like?

earnings-and-revenue-growth
NasdaqCM:FAT Earnings and Revenue Growth September 28th 2022

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. In the upcoming year, FAT Brands' earnings are expected to increase by 33%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since FAT is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on FAT for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy FAT. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. To that end, you should learn about the 4 warning signs we've spotted with FAT Brands (including 3 which are potentially serious).

If you are no longer interested in FAT Brands, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Valuation is complex, but we're helping make it simple.

Find out whether FAT Brands is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

About NasdaqCM:FAT

FAT Brands

FAT Brands Inc., a multi-brand franchising company, acquires, develops, and manages quick service, fast casual, casual dining, and polished casual dining restaurant concepts worldwide.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation4
Future Growth1
Past Performance0
Financial Health0
Dividends2

Read more about these checks in the individual report sections or in our analysis model.

Good value unattractive dividend payer.