Franchise Group
Market Cap
US$855.3m
Last Updated
2020/07/02 00:04 UTC
Data Sources
Company Financials
Executive Summary
Franchise Group, Inc. operates as a retailer, franchisor operator, and acquirer of franchised and franchisable businesses.
Risk Analysis
Earnings have declined by -74.89% per year over past 5 years
Shareholders have been substantially diluted in the past year
+ 1 more risk
Snowflake Analysis
Unattractive dividend payer and overvalued.
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's share price has been volatile over the past 3 months.
Market Performance
7 Day Return
-13.4%
FRG
1.9%
US Consumer Services
1.9%
US Market
1 Year Return
117.3%
FRG
22.7%
US Consumer Services
4.3%
US Market
Return vs Industry: FRG exceeded the US Consumer Services industry which returned 22.7% over the past year.
Return vs Market: FRG exceeded the US Market which returned 4.3% over the past year.
Shareholder returns
| FRG | Industry | Market | |
|---|---|---|---|
| 7 Day | -13.4% | 1.9% | 1.9% |
| 30 Day | 34.1% | 12.0% | 2.7% |
| 90 Day | 188.2% | 32.3% | 26.4% |
| 1 Year | 130.3%117.3% | 23.0%22.7% | 6.5%4.3% |
| 3 Year | 85.9%64.0% | 82.2%75.0% | 35.1%26.2% |
| 5 Year | 8.6%-11.3% | 207.1%184.2% | 67.0%48.4% |
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?
2.09x
Price to Book (PB) ratio
Share Price vs. Fair Value
Below Fair Value: FRG ($21.73) is trading above our estimate of fair value ($13.44)
Significantly Below Fair Value: FRG is trading above our estimate of fair value.
Price To Earnings Ratio
PE vs Industry: FRG is unprofitable, so we can't compare its PE Ratio to the 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 good value based on its PB Ratio (2.1x) compared to the US Consumer Services industry average (2.2x).
Next Steps
Future Growth
How is Franchise Group forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?
46.4%
Forecasted Consumer Services industry annual growth in earnings
In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Franchise Group has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.
This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.
Next Steps
- Take a look at our analysis of FRG’s management and see if the CEO’s compensation is within a reasonable range, who is on the board and if insiders have been trading lately.
- Explore growth companies in the Consumer Services industry.
Past Performance
How has Franchise Group performed over the past 5 years?
-74.9%
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 -74.9% 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 (18.3%).
Return on Equity
High ROE: FRG has a negative Return on Equity (-40.42%), 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 ($671.0M) do not cover its short term liabilities ($680.4M).
Long Term Liabilities: FRG's short term assets ($671.0M) do not cover its long term liabilities ($1.0B).
Debt to Equity History and Analysis
Debt Level: FRG's debt to equity ratio (246.1%) is considered high.
Reducing Debt: FRG's debt to equity ratio has increased from 71.7% to 246.1% over the past 5 years.
Debt Coverage: FRG's debt is not well covered by operating cash flow (0.3%).
Interest Coverage: Insufficient data to determine if FRG's interest payments on its debt are well covered by EBIT.
Balance Sheet
Next Steps
Dividend
What is Franchise Group current dividend yield, its reliability and sustainability?
4.60%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: FRG's dividend (4.6%) is higher than the bottom 25% of dividend payers in the US market (1.67%).
High Dividend: FRG's dividend (4.6%) is in the top 25% of dividend payers in the US market (4.49%)
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 5 years.
Current Payout to Shareholders
Dividend Coverage: FRG is paying a dividend but the company is unprofitable.
Future Payout to Shareholders
Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
0.8yrs
Average management tenure
CEO
Brian Kahn (46yo)
0.75
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 ($USD3.11M).
Compensation vs Earnings: Insufficient data to compare Brian's compensation with company performance.
Leadership Team
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| President | 0.75yr | US$3.15m | 6.18% $52.9m | |
| Executive VP & Chief Administrative Officer | 0.75yr | US$1.90m | 0.028% $243.3k | |
| Executive VP & Director | 2.5yrs | US$2.68m | 0.0052% $44.4k | |
| Chief Financial Officer | 0.75yr | no data | 0.032% $275.3k | |
| Chief Information Officer | 0.92yr | no data | no data | |
| Chief Marketing Officer | no data | no data | no data | |
| Chief Strategy Officer | 2.42yrs | no data | no data | |
| Corporate Secretary | no data | no data | no data | |
| Strategic Advisor | 2.08yrs | US$654.25k | no data |
0.8yrs
Average Tenure
47yo
Average Age
Experienced Management: FRG's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| President | 0.75yr | US$3.15m | 6.18% $52.9m | |
| Executive VP & Director | 2.5yrs | US$2.68m | 0.0052% $44.4k | |
| Independent Director | 2.33yrs | US$128.90k | 0.052% $446.7k | |
| Independent Director | 2.17yrs | US$137.74k | 0.034% $287.1k | |
| Independent Director | 2.17yrs | US$123.14k | 0.045% $381.7k | |
| Independent Chairman of the Board | 0.33yr | US$103.14k | 0.31% $2.6m | |
| Independent Director | 2.42yrs | US$132.19k | 0.045% $381.7k |
2.3yrs
Average Tenure
64yo
Average Age
Experienced Board: FRG's board of directors are not considered experienced ( 2.3 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: FRG 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 179.2%.
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$855.323m
- Shares outstanding: 39.36m
- 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 |
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 Shoppe. The company provides tax preparation services in the United States and Canada; and franchises and operates rent-to-own stores that lease durable goods, such as electronics, residential furniture, appliances, and household accessories to customers. It also operates as a retailer primarily focuses on providing customers with in-store and online access to purchase new, one-of-a kind, out-of-box, discontinued, obsolete, used, reconditioned, overstocked, and scratched and dented products in various merchandise categories, including home appliances, mattresses, furniture, and lawn and garden equipment, at prices that are lower than list prices; and specialty retailer of vitamins, minerals, herbs, specialty supplements, sports nutrition, and other health and wellness products. The company was formerly known as Liberty Tax, Inc., and changed its name to Franchise Group, Inc. in September 2019. Franchise Group, Inc. was incorporated in 2010 and is based in Virginia Beach, Virginia.
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/07/02 00:04 |
| End of Day Share Price | 2020/07/01 00:00 |
| Earnings | 2020/03/28 |
| 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.