Nathan's Famous Inc (NATH) Stock Analysis
Verdict: WATCH (do not buy)
Asset-light licensing powers 17.7% operating margins, but EPS contraction (-16.8%) and a 20.2x P/E cap upside in an illiquid microcap.
Investment score: 52/100
Analysis as of
Is Nathan's Famous Inc stock worth reviewing? The TradeMates thesis
The model views Nathan's Famous as a robust royalty-driven business facing near-term earnings headwinds. While asset-light licensing generates impressive 17.73% operating margins and reliable cash flow, FY2026 net income declined to $20.02M (-16.7% YoY) amid input cost pressures. At 20.23x P/E and EV/EBITDA of 13.53x, the stock is fairly valued relative to peer LOCO (12.31x) and FWRG (35.33x), warranting a HOLD rating.
7-factor investment score
- Valuation: 52/100 (weight 20%)
- Financial Health: 68/100 (weight 15%)
- Technical Momentum: 50/100 (weight 15%)
- Earnings Quality: 45/100 (weight 15%)
- Insider Sentiment: 50/100 (weight 10%)
- Analyst Consensus: 40/100 (weight 10%)
- Risk-Adjusted Return: 55/100 (weight 15%)
Nathan's Famous Inc opportunities and risks
What speaks for NATH
- High-margin licensing cash flows
What speaks against NATH
- Concentration in core licensing agreements
Peers and competitors
| Ticker | P/E | P/S | EV/EBITDA | Gross margin | Net margin | FCF yield |
|---|---|---|---|---|---|---|
| NATH | 20.3x | 2.4x | 13.5x | 28.9% | 11.8% | 4.7% |
| FWRG | 35.3x | 0.5x | 16.5x | 33.7% | 1.4% | -3.3% |
| DNUT | n/a | 0.4x | 9.5x | 46.8% | -6.5% | 7.0% |
| LOCO | 12.3x | 0.9x | 9.9x | 28.3% | 7.0% | 9.3% |
| KRUS | n/a | 1.3x | 58.7x | 11.3% | -0.7% | 1.8% |
| SERV | n/a | 42.6x | n/a | -370.1% | -2316.0% | -51.3% |
| Peer median | n/a | 0.9x | 9.9x | 28.3% | -0.7% | 1.8% |
Frequently asked questions about Nathan's Famous Inc (NATH)
Is NATH stock a good investment?
The TradeMates model rates Nathan's Famous Inc as WATCH (do not buy) with an investment score of 52/100. The model views Nathan's Famous as a robust royalty-driven business facing near-term earnings headwinds. While asset-light licensing generates impressive 17.73% operating margins and reliable cash flow, FY2026 net income declined to $20.02M (-16.7% YoY) amid input cost pressures. At 20.23x P/E and EV/EBITDA of 13.53x, the stock is fairly valued relative to peer LOCO (12.31x) and FWRG (35.33x), warranting a HOLD rating. This is algorithmic model output, not personal investment advice.
Is NATH stock a buy?
The TradeMates model verdict for NATH is WATCH (do not buy) with an investment score of 52/100. Treat this as a model signal to review, not a personal buy recommendation.