FRANCHISE GROUP INC (FRG) Fundamental Analysis & Valuation

NASDAQ:FRG • US35180X1054

Current stock price

29.88 USD
+0.03 (+0.1%)
At close:
29.94 USD
+0.06 (+0.2%)
After Hours:

This FRG fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

2

1. FRG Profitability Analysis

1.1 Basic Checks

  • In the past year FRG was profitable.
  • FRG had a positive operating cash flow in the past year.
FRG Yearly Net Income VS EBIT VS OCF VS FCFFRG Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 0 100M 200M 300M

1.2 Ratios

  • FRG has negative profitability rations, so we won't be analyzing them here.
  • FRG has a Return On Invested Capital (4.68%) which is comparable to the rest of the industry.
  • FRG had an Average Return On Invested Capital over the past 3 years of 7.05%. This is significantly below the industry average of 13.27%.
Industry RankSector Rank
ROA N/A
ROE N/A
ROIC 4.68%
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)7.05%
ROIC(5y)7.75%
FRG Yearly ROA, ROE, ROICFRG Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 0 20 40

1.3 Margins

  • FRG has a Operating Margin (3.57%) which is in line with its industry peers.
  • In the last couple of years the Operating Margin of FRG has declined.
  • FRG has a better Gross Margin (39.81%) than 62.88% of its industry peers.
  • FRG's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 3.57%
PM (TTM) N/A
GM 39.81%
OM growth 3Y-4.9%
OM growth 5Y-15.6%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-6.31%
GM growth 5YN/A
FRG Yearly Profit, Operating, Gross MarginsFRG Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 0 10 20 30 40 50

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ROAROEROICOperating and Profit MarginShow most profitable peers

1

2. FRG Health Analysis

2.1 Basic Checks

  • FRG has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
  • The number of shares outstanding for FRG has been reduced compared to 1 year ago.
  • The debt/assets ratio for FRG is higher compared to a year ago.
FRG Yearly Shares OutstandingFRG Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 10M 20M 30M 40M
FRG Yearly Total Debt VS Total AssetsFRG Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 1B 2B 3B

2.2 Solvency

  • Based on the Altman-Z score of 1.63, we must say that FRG is in the distress zone and has some risk of bankruptcy.
  • FRG has a Altman-Z score of 1.63. This is in the lower half of the industry: FRG underperforms 65.91% of its industry peers.
  • A Debt/Equity ratio of 6.97 is on the high side and indicates that FRG has dependencies on debt financing.
  • FRG has a Debt to Equity ratio of 6.97. This is amonst the worse of the industry: FRG underperforms 80.30% of its industry peers.
Industry RankSector Rank
Debt/Equity 6.97
Debt/FCF N/A
Altman-Z 1.63
ROIC/WACC0.63
WACC7.39%
FRG Yearly LT Debt VS Equity VS FCFFRG Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 0 500M 1B

2.3 Liquidity

  • FRG has a Current Ratio of 1.37. This is a normal value and indicates that FRG is financially healthy and should not expect problems in meeting its short term obligations.
  • The Current ratio of FRG (1.37) is comparable to the rest of the industry.
  • A Quick Ratio of 0.60 indicates that FRG may have some problems paying its short term obligations.
  • Looking at the Quick ratio, with a value of 0.60, FRG is in line with its industry, outperforming 50.76% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.37
Quick Ratio 0.6
FRG Yearly Current Assets VS Current LiabilitesFRG Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 500M 1B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

4

3. FRG Growth Analysis

3.1 Past

  • The earnings per share for FRG have decreased by -6.32% in the last year.
  • The Revenue has been growing slightly by 7.73% in the past year.
  • FRG shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 90.78% yearly.
EPS 1Y (TTM)-6.32%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-259.25%
Revenue 1Y (TTM)7.73%
Revenue growth 3Y221.37%
Revenue growth 5Y90.78%
Sales Q2Q%-5.14%

3.2 Future

  • The Earnings Per Share is expected to grow by 11.08% on average over the next years. This is quite good.
  • The Revenue is expected to grow by 3.12% on average over the next years.
EPS Next Y-49.12%
EPS Next 2Y-5.22%
EPS Next 3Y-8.96%
EPS Next 5Y11.08%
Revenue Next Year0.34%
Revenue Next 2Y1.48%
Revenue Next 3Y2.42%
Revenue Next 5Y3.12%

3.3 Evolution

  • When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
FRG Yearly Revenue VS EstimatesFRG Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 1B 2B 3B 4B 5B
FRG Yearly EPS VS EstimatesFRG Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2 4 6

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4

4. FRG Valuation Analysis

4.1 Price/Earnings Ratio

  • A Price/Earnings ratio of 8.39 indicates a reasonable valuation of FRG.
  • 76.52% of the companies in the same industry are more expensive than FRG, based on the Price/Earnings ratio.
  • FRG's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.60.
  • With a Price/Forward Earnings ratio of 9.34, the valuation of FRG can be described as very reasonable.
  • 72.73% of the companies in the same industry are more expensive than FRG, based on the Price/Forward Earnings ratio.
  • FRG is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.84, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 8.39
Fwd PE 9.34
FRG Price Earnings VS Forward Price EarningsFRG Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

  • FRG's Enterprise Value to EBITDA ratio is in line with the industry average.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 11.9
FRG Per share dataFRG EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 50 100

4.3 Compensation for Growth

  • A cheap valuation may be justified as FRG's earnings are expected to decrease with -8.96% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-5.22%
EPS Next 3Y-8.96%

More info and screens

Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

6

5. FRG Dividend Analysis

5.1 Amount

  • FRG has a Yearly Dividend Yield of 8.37%, which is a nice return.
  • FRG's Dividend Yield is rather good when compared to the industry average which is at 2.75. FRG pays more dividend than 96.21% of the companies in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.88, FRG pays a better dividend.
Industry RankSector Rank
Dividend Yield 8.37%

5.2 History

  • On average, the dividend of FRG grows each year by 33.91%, which is quite nice.
  • FRG has been paying a dividend for over 5 years, so it has already some track record.
  • FRG has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)33.91%
Div Incr Years3
Div Non Decr Years3
FRG Yearly Dividends per shareFRG Yearly Dividends per shareYearly Dividends per share 2019 2020 2021 2022 2023 0.5 1 1.5 2 2.5

5.3 Sustainability

  • FRG has negative earnings and hence a negative payout ratio. The dividend may be in danger.
  • The dividend of FRG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP-36.91%
EPS Next 2Y-5.22%
EPS Next 3Y-8.96%
FRG Yearly Income VS Free CF VS DividendFRG Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 0 100M 200M 300M

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FRG Fundamentals: All Metrics, Ratios and Statistics

FRANCHISE GROUP INC

NASDAQ:FRG (8/18/2023, 8:00:00 PM)

After market: 29.94 +0.06 (+0.2%)

29.88

+0.03 (+0.1%)

Chartmill FA Rating
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)08-02
Earnings (Next)11-01
Inst Owners0.05%
Inst Owner Change0%
Ins Owners25.23%
Ins Owner Change0%
Market Cap1.05B
Revenue(TTM)4.31B
Net Income(TTM)-289.50M
Analysts75
Price Target31.88 (6.69%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 8.37%
Yearly Dividend2.97
Dividend Growth(5Y)33.91%
DP-36.91%
Div Incr Years3
Div Non Decr Years3
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-79.29%
Min EPS beat(2)-79.29%
Max EPS beat(2)-79.29%
EPS beat(4)1
Avg EPS beat(4)9.9%
Min EPS beat(4)-79.29%
Max EPS beat(4)126.71%
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-3.29%
Min Revenue beat(2)-5.66%
Max Revenue beat(2)-0.91%
Revenue beat(4)2
Avg Revenue beat(4)0.48%
Min Revenue beat(4)-5.66%
Max Revenue beat(4)6.78%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)-15.08%
EPS NQ rev (1m)0%
EPS NQ rev (3m)10.03%
EPS NY rev (1m)0%
EPS NY rev (3m)-36.74%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.08%
Valuation
Industry RankSector Rank
PE 8.39
Fwd PE 9.34
P/S 0.24
P/FCF N/A
P/OCF 20.26
P/B 4.66
P/tB N/A
EV/EBITDA 11.9
EPS(TTM)3.56
EY11.91%
EPS(NY)3.2
Fwd EY10.7%
FCF(TTM)-0.26
FCFYN/A
OCF(TTM)1.47
OCFY4.93%
SpS122.5
BVpS6.41
TBVpS-21.94
PEG (NY)N/A
PEG (5Y)N/A
Graham NumberN/A
Profitability
Industry RankSector Rank
ROA N/A
ROE N/A
ROCE N/A
ROIC 4.68%
ROICexc 4.88%
ROICexgc 8.15%
OM 3.57%
PM (TTM) N/A
GM 39.81%
FCFM N/A
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)7.05%
ROIC(5y)7.75%
ROICexc(3y)7.65%
ROICexc(5y)8.86%
ROICexgc(3y)13.98%
ROICexgc(5y)14.48%
ROCE(3y)N/A
ROCE(5y)N/A
ROICexgc growth 3Y5.57%
ROICexgc growth 5Y-5.77%
ROICexc growth 3Y-0.91%
ROICexc growth 5Y-10.96%
OM growth 3Y-4.9%
OM growth 5Y-15.6%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-6.31%
GM growth 5YN/A
F-Score3
Asset Turnover1.21
Health
Industry RankSector Rank
Debt/Equity 6.97
Debt/FCF N/A
Debt/EBITDA 6.51
Cap/Depr 69.71%
Cap/Sales N/A
Interest Coverage N/A
Cash Conversion N/A
Profit Quality N/A
Current Ratio 1.37
Quick Ratio 0.6
Altman-Z 1.63
F-Score3
WACC7.39%
ROIC/WACC0.63
Cap/Depr(3y)65.22%
Cap/Depr(5y)58.27%
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-6.32%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-259.25%
EPS Next Y-49.12%
EPS Next 2Y-5.22%
EPS Next 3Y-8.96%
EPS Next 5Y11.08%
Revenue 1Y (TTM)7.73%
Revenue growth 3Y221.37%
Revenue growth 5Y90.78%
Sales Q2Q%-5.14%
Revenue Next Year0.34%
Revenue Next 2Y1.48%
Revenue Next 3Y2.42%
Revenue Next 5Y3.12%
EBIT growth 1Y-52.42%
EBIT growth 3Y205.63%
EBIT growth 5Y61.02%
EBIT Next Year33.81%
EBIT Next 3Y16.27%
EBIT Next 5Y16.31%
FCF growth 1Y-105.67%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-73.81%
OCF growth 3YN/A
OCF growth 5YN/A

FRANCHISE GROUP INC / FRG Fundamental Analysis FAQ

Can you provide the ChartMill fundamental rating for FRANCHISE GROUP INC?

ChartMill assigns a fundamental rating of 3 / 10 to FRG.


What is the valuation status of FRANCHISE GROUP INC (FRG) stock?

ChartMill assigns a valuation rating of 4 / 10 to FRANCHISE GROUP INC (FRG). This can be considered as Fairly Valued.


What is the profitability of FRG stock?

FRANCHISE GROUP INC (FRG) has a profitability rating of 2 / 10.


Can you provide the financial health for FRG stock?

The financial health rating of FRANCHISE GROUP INC (FRG) is 1 / 10.


How sustainable is the dividend of FRANCHISE GROUP INC (FRG) stock?

The dividend rating of FRANCHISE GROUP INC (FRG) is 6 / 10 and the dividend payout ratio is -36.91%.