Franchise Group
Market Cap
US$1.3b
Last Updated
2021/01/23 23:54 UTC
Data Sources
Company Financials +
Executive Summary
Franchise Group, Inc. operates as a retailer, franchisor operator, and acquirer of franchised and franchisable businesses. More Details
Snowflake Analysis
Mediocre balance sheet with moderate growth potential.
Similar Companies
Share Price & News
How has Franchise Group's share price performed over time and what events caused price changes?
Latest Share Price and Events
Stable Share Price: FRG is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.
Volatility Over Time: FRG's weekly volatility has decreased from 13% to 6% over the past year.
Market Performance
7 Day Return
1.0%
FRG
9.1%
US Consumer Services
2.3%
US Market
1 Year Return
51.2%
FRG
36.1%
US Consumer Services
23.8%
US Market
Return vs Industry: FRG exceeded the US Consumer Services industry which returned 34.6% over the past year.
Return vs Market: FRG exceeded the US Market which returned 23.7% over the past year.
Shareholder returns
| FRG | Industry | Market | |
|---|---|---|---|
| 7 Day | 1.0% | 9.1% | 2.3% |
| 30 Day | 12.2% | 8.4% | 4.8% |
| 90 Day | 25.5% | 9.2% | 14.5% |
| 1 Year | 61.0%51.2% | 36.5%36.1% | 26.6%23.8% |
| 3 Year | 225.1%190.9% | 56.5%50.9% | 45.0%35.4% |
| 5 Year | 83.8%49.8% | 272.5%244.3% | 126.2%101.0% |
Long-Term Price Volatility Vs. Market
How volatile is Franchise Group's share price compared to the market and industry in the last 5 years?
Simply Wall St News
No news available
Valuation
Is Franchise Group undervalued compared to its fair value and its price relative to the market?
>50%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: FRG ($32.14) is trading below our estimate of fair value ($80.49)
Significantly Below Fair Value: FRG is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: FRG is unprofitable, so we can't compare its PE Ratio to the US Consumer Services industry average.
PE vs Market: FRG is unprofitable, so we can't compare its PE Ratio to the US market.
Price to Earnings Growth Ratio
PEG Ratio: Insufficient data to calculate FRG's PEG Ratio to determine if it is good value.
Price to Book Ratio
PB vs Industry: FRG is overvalued based on its PB Ratio (3.2x) compared to the US Consumer Services industry average (2.7x).
Next Steps
Future Growth
How is Franchise Group forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?
72.8%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: FRG is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2%).
Earnings vs Market: FRG is forecast to become profitable over the next 3 years, which is considered above average market growth.
High Growth Earnings: FRG's is expected to become profitable in the next 3 years.
Revenue vs Market: FRG's revenue (6% per year) is forecast to grow slower than the US market (10.6% per year).
High Growth Revenue: FRG's revenue (6% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: Insufficient data to determine if FRG's Return on Equity is forecast to be high in 3 years time
Next Steps
Past Performance
How has Franchise Group performed over the past 5 years?
-81.6%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: FRG is currently unprofitable.
Growing Profit Margin: FRG is currently unprofitable.
Past Earnings Growth Analysis
Earnings Trend: FRG is unprofitable, and losses have increased over the past 5 years at a rate of 81.6% per year.
Accelerating Growth: Unable to compare FRG's earnings growth over the past year to its 5-year average as it is currently unprofitable
Earnings vs Industry: FRG is unprofitable, making it difficult to compare its past year earnings growth to the Consumer Services industry (10.6%).
Return on Equity
High ROE: FRG has a negative Return on Equity (-33%), as it is currently unprofitable.
Next Steps
Financial Health
How is Franchise Group's financial position?
Financial Position Analysis
Short Term Liabilities: FRG's short term assets ($606.6M) exceed its short term liabilities ($537.9M).
Long Term Liabilities: FRG's short term assets ($606.6M) do not cover its long term liabilities ($966.1M).
Debt to Equity History and Analysis
Debt Level: FRG's debt to equity ratio (153.6%) is considered high.
Reducing Debt: FRG's debt to equity ratio has increased from 82% to 153.6% over the past 5 years.
Balance Sheet
Cash Runway Analysis
For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.
Stable Cash Runway: Whilst unprofitable FRG has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.
Forecast Cash Runway: FRG is unprofitable but has sufficient cash runway for more than 3 years, even with free cash flow being positive and shrinking by 0.5% per year.
Next Steps
Dividend
What is Franchise Group current dividend yield, its reliability and sustainability?
3.11%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: FRG's dividend (3.11%) is higher than the bottom 25% of dividend payers in the US market (1.38%).
High Dividend: FRG's dividend (3.11%) is low compared to the top 25% of dividend payers in the US market (3.85%).
Stability and Growth of Payments
Stable Dividend: FRG has been paying a dividend for less than 10 years and during this time payments have been volatile.
Growing Dividend: FRG's dividend payments have increased, but the company has only paid a dividend for 6 years.
Current Payout to Shareholders
Dividend Coverage: FRG is paying a dividend but the company is unprofitable.
Future Payout to Shareholders
Future Dividend Coverage: FRG's dividends in 3 years are forecast to be well covered by earnings (39.3% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
1.3yrs
Average management tenure
CEO
Brian Kahn (46 yo)
1.25yrs
Tenure
US$3,149,732
Compensation
Mr. Brian R. Kahn, CFA, founded Vintage Capital Management, LLC in 1998 and serves as its Managing Partner and has been its Investment Manager since 1998, where he is responsible for all aspects of transac...
CEO Compensation Analysis
Compensation vs Market: Brian's total compensation ($USD3.15M) is about average for companies of similar size in the US market ($USD3.86M).
Compensation vs Earnings: Insufficient data to compare Brian's compensation with company performance.
Leadership Team
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| President | 1.25yrs | US$3.15m | 14.44% $ 186.1m | |
| Executive VP & Chief Administrative Officer | 1.25yrs | US$1.90m | 0.055% $ 710.4k | |
| Executive VP & Director | 3yrs | US$2.68m | 0.14% $ 1.8m | |
| Chief Financial Officer | 1.25yrs | no data | 0.040% $ 521.4k | |
| Chief Information Officer | 1.42yrs | no data | no data | |
| Chief Marketing Officer | no data | no data | no data | |
| Chief Strategy Officer | 2.92yrs | no data | no data | |
| Chief Franchising Officer | 0.42yr | no data | no data | |
| Corporate Secretary | no data | no data | no data | |
| Strategic Advisor | 2.58yrs | US$654.25k | no data |
1.3yrs
Average Tenure
47yo
Average Age
Experienced Management: FRG's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| President | 1.25yrs | US$3.15m | 14.44% $ 186.1m | |
| Executive VP & Director | 3yrs | US$2.68m | 0.14% $ 1.8m | |
| Independent Director | 2.83yrs | US$128.90k | 0.016% $ 202.2k | |
| Independent Director | 2.67yrs | US$137.74k | 0.034% $ 437.8k | |
| Independent Director | 2.67yrs | US$123.14k | 0.0090% $ 116.3k | |
| Independent Chairman of the Board | 0.83yr | US$103.14k | 0.27% $ 3.5m | |
| Independent Director | 2.92yrs | US$132.19k | 0.0090% $ 116.3k |
2.8yrs
Average Tenure
64yo
Average Age
Experienced Board: FRG's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 94.6%.
Top Shareholders
Company Information
Franchise Group, Inc.'s company bio, employee growth, exchange listings and data sources
Key Information
- Name: Franchise Group, Inc.
- Ticker: FRG
- Exchange: NasdaqGM
- Founded: 2010
- Industry: Specialized Consumer Services
- Sector: Consumer Services
- Market Cap: US$1.288b
- Shares outstanding: 40.09m
- Website: https://www.franchisegrp.com
Number of Employees
Location
- Franchise Group, Inc.
- 1716 Corporate Landing Parkway
- Virginia Beach
- Virginia
- 23454
- United States
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| FRG | NasdaqGM (Nasdaq Global Market) | Yes | Class A Common Stock | US | USD | Jun 2012 |
| 3HC | DB (Deutsche Boerse AG) | Yes | Class A Common Stock | DE | EUR | Jun 2012 |
| FRGA.P | NasdaqGM (Nasdaq Global Market) | 7.50% CUM PFD A | US | USD | Sep 2020 |
Biography
Franchise Group, Inc. operates as a retailer, franchisor operator, and acquirer of franchised and franchisable businesses. It operates through 4 segments: Liberty Tax, Buddy’s, Sears Outlet, and Vitamin Sh...
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2021/01/23 23:54 |
| End of Day Share Price | 2021/01/22 00:00 |
| Earnings | 2020/09/26 |
| Annual Earnings | 2019/12/28 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.