Two of the nation’s leading restaurant chains are flashing bright green on their valuation scores in Benzinga’s Edge Stock Rankings, highlighting robust fundamentals amid low valuations.
2 Undervalued Stocks With Big Jumps In Valuation Scores
The Value score in Benzinga’s Edge Rankings is calculated based on the stock’s valuation relative to its peers, with a focus on fundamental business metrics such as assets, earnings, sales and operating performance, among other things.
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A rising percentile score for a stock signals the market’s growing confidence in its underlying value proposition, relative to its market valuation.
1. RCI Hospitality Holdings Inc.
The owner and operator of several nightclubs, sports bars and strip clubs, RCI Hospitality Holdings Inc. RICK is seeing its Value score soar, from 55.6 to 62.9 within the span of a week.
This can primarily be attributed to the stock’s low valuation of just 13 to 14 times earnings, relative to its historical average of 25 to 26 times, and a broader industry average of 24.4 times earnings. Given the nature of its nightlife business, RCI often trades with a regulatory risk discount, but if those risks are already priced in, the valuation could re-rate higher.
According to Benzinga’s Edge Stock Rankings, the stock scores high on Quality and Value, but has an unfavorable price trend in the short, medium and long terms. Click here for deeper insights into the stock, its peers and competitors.
2. Cheesecake Factory Inc.
Popular restaurant chain, Cheesecake Factory Inc. CAKE is up 5.75 points in Benzinga’s Value score, touching 38.36 points from 32.61 just a week ago.
We can attribute this to comparable sales at its flagship restaurants rising 1.2%, signaling steady consumer demand despite broader industry pressures. Management also emphasized “continued margin expansion” due to operational efficiencies in food, labor, and productivity, contributing to stronger profitability.
The stock scores high on Momentum, Growth, Value and Quality in Benzinga’s Edge Stock Rankings, with a favorable price trend in the long-term. Click here for more insights into the stock, and to see how it compares with competitors in this space.
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