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FAT Brands

Nasdaq:FAT
Snowflake Description

Imperfect balance sheet and overvalued.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
FAT
Nasdaq
$25M
Market Cap
  1. Home
  2. US
  3. Consumer Services
Company description

FAT Brands Inc., a multi-brand franchising company, acquires, markets, and develops fast casual and casual dining restaurant concepts. The last earnings update was 147 days ago. More info.


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FAT Share Price and Events
7 Day Returns
-17.9%
NasdaqCM:FAT
-10.6%
US Hospitality
-1.1%
US Market
1 Year Returns
-60%
NasdaqCM:FAT
-46.7%
US Hospitality
-13.6%
US Market
FAT Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
FAT Brands (FAT) -17.9% -46.2% -54% -60% - -
US Hospitality -10.6% -37.4% -50% -46.7% -38.5% -37.2%
US Market -1.1% -17.8% -22.5% -13.6% 4.9% 16.3%
1 Year Return vs Industry and Market
  • FAT underperformed the Hospitality industry which returned -46.7% over the past year.
  • FAT underperformed the Market in United States of America which returned -13.6% over the past year.
Price Volatility
FAT
Industry
5yr Volatility vs Market

Value

 Is FAT Brands undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of FAT Brands to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for FAT Brands.

NasdaqCM:FAT Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Extrapolated from most recent financials. See below
Discount Rate (Cost of Equity) See below 10.7%
Perpetual Growth Rate 10-Year US Government Bond Rate 1.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NasdaqCM:FAT
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 1.7%
Equity Risk Premium S&P Global 5.4%
Hospitality Unlevered Beta Simply Wall St/ S&P Global 0.8
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.805 (1 + (1- 21%) (184.1%))
1.653
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.65
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 1.74% + (1.653 * 5.44%)
10.73%

Discounted Cash Flow Calculation for NasdaqCM:FAT using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for FAT Brands is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

Note: Free cash flow to equity valuations ignore the company's cash or debt.

NasdaqCM:FAT DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (USD, Millions) Source Present Value
Discounted (@ 10.73%)
2020 3.25 Est @ 6.67% 2.94
2021 3.42 Est @ 5.19% 2.79
2022 3.56 Est @ 4.15% 2.63
2023 3.69 Est @ 3.43% 2.45
2024 3.79 Est @ 2.92% 2.28
2025 3.89 Est @ 2.57% 2.11
2026 3.98 Est @ 2.32% 1.95
2027 4.07 Est @ 2.15% 1.80
2028 4.15 Est @ 2.02% 1.66
2029 4.23 Est @ 1.94% 1.53
Present value of next 10 years cash flows $22.00
NasdaqCM:FAT DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2029 × (1 + g) ÷ (Discount Rate – g)
= $4.23 × (1 + 1.74%) ÷ (10.73% – 1.74%)
$47.86
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= $47.86 ÷ (1 + 10.73%)10
$17.27
NasdaqCM:FAT Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= $22.00 + $17.27
$39.27
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $39.27 / 11.84
$3.32
NasdaqCM:FAT Discount to Share Price
Calculation Result
Value per share (USD) From above. $3.32
Current discount Discount to share price of $2.07
= -1 x ($2.07 - $3.32) / $3.32
37.6%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price FAT Brands is available for.
Intrinsic value
38%
Share price is $2.07 vs Future cash flow value of $3.32
Current Discount Checks
For FAT Brands to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • FAT Brands's share price is below the future cash flow value, and at a moderate discount (> 20%).
  • FAT Brands's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for FAT Brands's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are FAT Brands's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NasdaqCM:FAT PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-09-29) in USD $-0.24
NasdaqCM:FAT Share Price ** NasdaqCM (2020-04-02) in USD $2.07
United States of America Hospitality Industry PE Ratio Median Figure of 65 Publicly-Listed Hospitality Companies 12.39x
United States of America Market PE Ratio Median Figure of 2,943 Publicly-Listed Companies 12.9x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of FAT Brands.

NasdaqCM:FAT PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NasdaqCM:FAT Share Price ÷ EPS (both in USD)

= 2.07 ÷ -0.24

-8.72x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • FAT Brands is loss making, we can't compare its value to the US Hospitality industry average.
  • FAT Brands is loss making, we can't compare the value of its earnings to the United States of America market.
Price based on expected Growth
Does FAT Brands's expected growth come at a high price?
Raw Data
NasdaqCM:FAT PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section -8.72x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 0 Analysts
Not available
United States of America Hospitality Industry PEG Ratio Median Figure of 50 Publicly-Listed Hospitality Companies 0.62x
United States of America Market PEG Ratio Median Figure of 2,006 Publicly-Listed Companies 0.95x

*Line of best fit is calculated by linear regression .

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Unable to calculate PEG ratio for FAT Brands, we can't assess if its growth is good value.
Price based on value of assets
What value do investors place on FAT Brands's assets?
Raw Data
NasdaqCM:FAT PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-09-29) in USD $0.52
NasdaqCM:FAT Share Price * NasdaqCM (2020-04-02) in USD $2.07
United States of America Hospitality Industry PB Ratio Median Figure of 106 Publicly-Listed Hospitality Companies 1.31x
United States of America Market PB Ratio Median Figure of 5,140 Publicly-Listed Companies 1.25x
NasdaqCM:FAT PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NasdaqCM:FAT Share Price ÷ Book Value per Share (both in USD)

= 2.07 ÷ 0.52

3.98x

* Primary Listing of FAT Brands.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • FAT Brands is overvalued based on assets compared to the US Hospitality industry average.
X
Value checks
We assess FAT Brands's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Hospitality industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Hospitality industry average (and greater than 0)? (1 check)
  5. FAT Brands has a total score of 1/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is FAT Brands expected to perform in the next 1 to 3 years based on estimates from 0 analysts?

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 FAT Brands 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 Simply Wall St do have past financial data. You can see them here.

Show me the analysis anyway

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
16.2%
Expected Hospitality industry annual growth in earnings.
Earnings growth vs Low Risk Savings
Is FAT Brands expected to grow at an attractive rate?
  • Unable to compare FAT Brands's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
  • Unable to compare FAT Brands's earnings growth to the United States of America market average as no estimate data is available.
  • Unable to compare FAT Brands's revenue growth to the United States of America market average as no estimate data is available.
Annual Growth Rates Comparison
Raw Data
NasdaqCM:FAT Future Growth Rates Data Sources
Data Point Source Value (per year)
United States of America Hospitality Industry Earnings Growth Rate Market Cap Weighted Average 16.2%
United States of America Hospitality Industry Revenue Growth Rate Market Cap Weighted Average 8.8%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 12.3%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.2%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NasdaqCM:FAT Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (6 months ago) See Below
Future Estimates Average of up to 0 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NasdaqCM:FAT Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
NasdaqCM:FAT Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2019-09-29 22 3 -3
2019-06-30 21 2 -4
2019-03-31 19 0 -3
2018-12-30 18 2 -2
2018-07-01 8 -1
2018-04-01 6 0
2017-12-31 4 2 0
2016-12-25 10 4

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Unable to determine if FAT Brands is high growth as no earnings estimate data is available.
  • Unable to determine if FAT Brands is high growth as no revenue estimate data is available.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NasdaqCM:FAT Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (6 months ago) See Below
Future Estimates Average of up to 0 Analyst Estimates (S&P Global) See Below

All data from FAT Brands Company Filings, last reported 6 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqCM:FAT Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
NasdaqCM:FAT Past Financials Data
Date (Data in USD Millions) EPS *
2019-09-29 -0.24
2019-06-30 -0.33
2019-03-31 -0.27
2018-12-30 -0.16
2018-07-01 -0.06
2018-04-01 -0.01
2017-12-31 0.03
2016-12-25 0.41

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Unable to establish if FAT Brands will efficiently use shareholders’ funds in the future without estimates of Return on Equity.

Next steps:

  1. Take a look at our analysis of FAT’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.
  2. FAT Brands's future outlook can be gauged by looking at industry trends and market size, and determining how well-positioned the company is compared to its competitors. Take a look at other high-growth Consumer Services companies here
  3. FAT Brands's competitive advantages and company strategy can generally be found in its financial reports archived here.
  4. Use fundamentals to screen for another stock to analyse from our database of over 75,000 companies worldwide
X
Future performance checks
We assess FAT Brands's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
FAT Brands has a total score of 0/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has FAT Brands performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare FAT Brands's growth in the last year to its industry (Hospitality).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • FAT Brands does not make a profit and there is insufficient past data to establish if their 5 year on year earnings growth rate was positive.
  • Unable to compare FAT Brands's 1-year earnings growth to the 5-year average as it is not currently profitable.
  • Unable to compare FAT Brands's 1-year growth to the US Hospitality industry average as it is not currently profitable.
Earnings and Revenue History
FAT Brands's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from FAT Brands Company Filings, last reported 6 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqCM:FAT Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-09-29 21.66 -2.75 10.60
2019-06-30 21.04 -3.90 10.33
2019-03-31 19.06 -3.02 10.10
2018-12-30 17.77 -1.80 9.84
2018-07-01 7.53 -0.59 1.60
2018-04-01 5.74 -0.10 2.06
2017-12-31 4.31 0.24 2.66
2016-12-25 10.06 4.20 3.60

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • It is difficult to establish if FAT Brands has efficiently used shareholders’ funds last year (Return on Equity greater than 20%) as it is loss-making.
  • FAT Brands used its assets more efficiently than the US Hospitality industry average last year based on Return on Assets.
  • It is difficult to establish if FAT Brands improved its use of capital last year versus 3 years ago (Return on Capital Employed) as it is currently loss-making.
X
Past performance checks
We assess FAT Brands's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Hospitality industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
FAT Brands has a total score of 1/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is FAT Brands's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up FAT Brands's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • FAT Brands's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
  • FAT Brands's long term commitments exceed its cash and other short term assets.
Balance sheet
This treemap shows a more detailed breakdown of FAT Brands's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is not covered by short term assets, assets are 0.2x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from FAT Brands Company Filings, last reported 6 months ago.

NasdaqCM:FAT Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2019-09-29 6.69 44.09 0.31
2019-06-30 5.29 43.61 0.54
2019-03-31 5.53 33.96 0.69
2018-12-30 5.97 29.59 0.65
2018-07-01 6.59 12.90 0.96
2018-04-01 -1.23 17.47 0.02
2017-12-31 2.01 18.13 0.03
2016-12-25
  • FAT Brands's level of debt (659.2%) compared to net worth is high (greater than 40%).
  • Unable to establish if FAT Brands's debt level has increased without past 5-year debt data.
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.

  • Whilst loss making FAT Brands has sufficient cash runway for more than 3 years if it maintains the current positive free cash flow level.
  • Whilst loss making FAT Brands has sufficient cash runway for more than 3 years, even with free cash flow being positive and shrinking by -9.3% per year.
X
Financial health checks
We assess FAT Brands's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. FAT Brands has a total score of 2/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is FAT Brands's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
0%
Current annual income from FAT Brands dividends.
If you bought $2,000 of FAT Brands shares you are expected to receive $0 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Unable to evaluate FAT Brands's dividend yield against the bottom 25% of dividend payers as the company has not reported any payouts.
  • Unable to evaluate FAT Brands's dividend against the top 25% market benchmark as the company has not reported any payouts.
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NasdaqCM:FAT Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 0 Analyst Estimates (S&P Global) See Below
United States of America Hospitality Industry Average Dividend Yield Market Cap Weighted Average of 39 Stocks 5.8%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 1943 Stocks 3.1%
United States of America Minimum Threshold Dividend Yield 10th Percentile 1.1%
United States of America Bottom 25% Dividend Yield 25th Percentile 2%
United States of America Top 25% Dividend Yield 75th Percentile 5.6%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NasdaqCM:FAT Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
NasdaqCM:FAT Past Annualized Dividends Data
Date (Data in $) Dividend per share (annual) Avg. Yield (%)
2019-11-08 0.000 0.000
2019-11-07 0.000 0.000
2019-08-14 0.000 0.000
2019-08-13 0.000 0.000
2019-05-14 0.000 0.000
2019-03-29 0.470 9.364
2019-03-26 0.470 9.051
2018-10-08 0.470 8.269
2018-06-27 0.470 6.361
2018-02-08 0.470 6.967

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Unable to perform a dividend volatility check as FAT Brands has not reported any payouts.
  • Unable to verify if FAT Brands's dividend has been increasing as the company has not reported any payouts.
Current Payout to shareholders
What portion of FAT Brands's earnings are paid to the shareholders as a dividend.
  • Unable to calculate sustainability of dividends as FAT Brands has not reported any payouts.
Future Payout to shareholders
  • Insufficient estimate data to determine if a dividend will be paid in 3 years and that it will be sustainable.
X
Income/ dividend checks
We assess FAT Brands's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 1.1%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can FAT Brands afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. FAT Brands has a total score of 0/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of FAT Brands's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Andrew Wiederhorn
COMPENSATION $419,962
AGE 53
TENURE AS CEO 2.5 years
CEO Bio

Mr. Andrew A. Wiederhorn, also known as Andy, has been Chief Executive Officer, President and Director at FAT Brands Inc. since October 2017. Mr. Wiederhorn has been the Chairman of the Board and Chief Executive Officer of Fog Cutter Capital Group Inc. since November 2005 and served as its Treasurer and Secretary since 1997. Mr. Wiederhorn serves as the Chairman and Chief Executive Officer of Fatburger Inc. (alternate name Fatburger North America, Inc.). Mr. Wiederhorn served as the Chief Strategic Officer of Fog Cutter Capital Group Inc. from August 2004 to November 2005. Previously, he served as the Chairman and Chief Executive Officer of Fog Cutter Capital Group Inc. until June 2004 and again served as its Co-Chairman and Co-Chief Executive Officer from June 2004 to August 2004. He served as the Chairman, Chief Executive Officer, Secretary and Treasurer of Wilshire Financial Services Group Inc. (“WFSG”) until August 1999. In 1987, he founded Wilshire Credit Corporation and served as the Chief Executive Officer of WCC and certain of its affiliates until August 1999. He has been a Director of Fog Cutter Capital Group Inc. since 1997. He serves as a Director of CCKX Incorporated. He serves as a Director of the Citizens Crime Commission of Portland Oregon. He has been an Executive Board Member of the Boy Scouts of America, Cascade Pacific Council since 1997. He was Chairman and Chief Executive Officer of Wilshire Real Estate Investment Inc. until December 31, 1999. He was Chairman, Secretary and Chief Executive Officer of Beverly Hills Bancorp Inc. He served as a Board Member of The University of Southern California Associates since 1997. He served as a Director of Strouds Acquisition Corp. and Strouds Inc. He served as a Director of Wilshire Financial Services Group Inc. (“WFSG”) until August 1999. He served as the President and Director Emeritus of The Boys and Girls Aid Society of Oregon from 1993 to 2002. Mr. Wiederhorn received a B.S. degree in Business Administration from the University of Southern California in 1987.

CEO Compensation
  • Andrew's compensation has increased whilst company is loss making.
  • Andrew's remuneration is lower than average for companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the FAT Brands management team in years:

2.3
Average Tenure
50.5
Average Age
  • The tenure for the FAT Brands management team is about average.
Management Team

Andrew Wiederhorn

TITLE
President
COMPENSATION
$420K
AGE
53
TENURE
2.5 yrs

Rebecca Hershinger

TITLE
CFO & Corporate Secretary
COMPENSATION
$296K
AGE
45
TENURE
1.7 yrs

Ron Roe

TITLE
Senior Vice President of Finance
COMPENSATION
$320K
AGE
42
TENURE
1.7 yrs

Don Berchtold

TITLE
Executive VP & Chief Concept Officer
COMPENSATION
$420K
AGE
73
TENURE
2.2 yrs

Thayer Wiederhorn

TITLE
Chief Marketing Officer
TENURE
3.1 yrs

Taylor Wiederhorn

TITLE
Chief Development Officer
TENURE
3.1 yrs

Gregg Nettleton

TITLE
President & COO of Casual Dining Division
COMPENSATION
$219K
AGE
63
TENURE
2.5 yrs

Toni Bianco

TITLE
President & COO of Fatburger
AGE
48
TENURE
2.2 yrs
Board of Directors Tenure

Average tenure and age of the FAT Brands board of directors in years:

2.5
Average Tenure
64
Average Age
  • The average tenure for the FAT Brands board of directors is less than 3 years, this suggests a new board.
Board of Directors

Ed Rensi

TITLE
Independent Chairman of the Board
COMPENSATION
$80K
AGE
74
TENURE
2.5 yrs

Andrew Wiederhorn

TITLE
President
COMPENSATION
$420K
AGE
53
TENURE
2.5 yrs

Marc Holtzman

TITLE
Independent Director
COMPENSATION
$80K
AGE
59
TENURE
2.5 yrs

Jim Neuhauser

TITLE
Independent Director
COMPENSATION
$80K
AGE
60
TENURE
2.5 yrs

Squire Junger

TITLE
Independent Director
COMPENSATION
$80K
AGE
69
TENURE
2.5 yrs

Silvia Kessel

TITLE
Independent Director
COMPENSATION
$80K
AGE
68
TENURE
2.5 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month open market individual insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
12. Nov 19 Buy Scott Fortunoff Individual 10. Sep 19 01. Oct 19 23,629 $5.10 $112,332
12. Nov 19 Buy Gregory Fortunoff Individual 10. Sep 19 01. Nov 19 20,136 $5.11 $0
20. Aug 19 Buy John Junger Individual 15. Aug 19 16. Aug 19 5,000 $3.92 $19,111
15. Jun 19 Buy James Neuhauser Individual 12. Jun 19 13. Jun 19 11,000 $4.18 $45,320
15. Jun 19 Buy Andrew Wiederhorn Individual 12. Jun 19 12. Jun 19 1,000 $3.97 $3,970
24. May 19 Buy John Junger Individual 21. May 19 21. May 19 6,270 $4.76 $29,731
X
Management checks
We assess FAT Brands's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. FAT Brands has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

FAT Brands (NASDAQ:FAT) Has A Somewhat Strained Balance Sheet

Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. … NasdaqCM:FAT Historical Debt, August 6th 2019 A Look At FAT Brands's Liabilities According to the last reported balance sheet, FAT Brands had liabilities of US$11.9m due within 12 months, and liabilities of US$43.3m due beyond 12 months. … Our View To be frank both FAT Brands's net debt to EBITDA and its track record of covering its interest expense with its EBIT make us rather uncomfortable with its debt levels.

Simply Wall St -

Are Dividend Investors Getting More Than They Bargained For With FAT Brands Inc.'s (NASDAQ:FAT) Dividend?

A dividend paying company with growing earnings can be rewarding in the long term. … Unfortunately, one common occurrence with dividend companies is for investors to be enticed in by the seemingly attractive yield, and lose money when the company has to cut its dividend payments. … Some readers mightn't know much about FAT Brands's 9.7% dividend, as it has only been paying distributions for a year or so.

Simply Wall St -

Are Insiders Buying FAT Brands Inc. (NASDAQ:FAT) Stock?

That means that an insider was happy to buy shares at above the current price. … Happily, we note that in the last year insiders bought 109.46k shares for a total of US$772k … In total, FAT Brands insiders bought more than they sold over the last year

Simply Wall St -

Interested In FAT Brands Inc (NASDAQ:FAT)? Here's How It Performed Recently

Investors with a long-term horizong may find it valuable to assess FAT Brands Inc's (NASDAQ:FAT) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. … To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. … I recommend you continue to research FAT Brands to get a better picture of the stock by looking at: Future Outlook: What are well-informed industry analysts predicting for FAT’s future growth?

Simply Wall St -

Interested In The Consumer Sector? Take A Look At FAT Brands Inc (NASDAQ:FAT)

Consumer discretionary analysts are forecasting for the entire industry, a strong double-digit growth of 12.28% in the upcoming year , and an optimistic near-term growth of 14.77% over the next couple of years. … On the stock-level, FAT Brands is trading at a lower PE ratio of 19x, making it cheaper than the average leisure stock. … Although the market is expecting lower growth for the company relative to its peers, FAT Brands is also trading at a discount, meaning that there could be some value from a potential mispricing.

Simply Wall St -

Should You Buy FAT Brands Inc (FAT) At $9.5?

Formula Price-Earnings Ratio = Price per share ÷ Earnings per share P/E Calculation for FAT Price per share = 9.5 Earnings per share = 0.42 ∴ Price-Earnings Ratio = 9.5 ÷ 0.42 = 22.6x The P/E ratio isn’t a metric you view in isolation and only becomes useful when you compare it against other similar companies. … Since FAT's P/E of 22.6x is lower than its industry peers (25x), it means that investors are paying less than they should for each dollar of FAT's earnings. … For example, if you are inadvertently comparing lower risk firms with FAT, then FAT’s P/E would naturally be lower than its peers, since investors would value those with lower risk with a higher price.

Simply Wall St -

Company Info

Description

FAT Brands Inc., a multi-brand franchising company, acquires, markets, and develops fast casual and casual dining restaurant concepts. As of June 27, 2019, it owned 8 restaurant brands, including Fatburger, Buffalo’s Cafe, Buffalo’s Express, Hurricane Grill & Wings, Elevation Burger, Yalla Mediterranean, Ponderosa Steakhouse, and Bonanza Steakhouse, as well as franchised approximately 400 units worldwide. The company was founded in 2017 and is headquartered in Beverly Hills, California. FAT Brands Inc. is a subsidiary of Fog Cutter Capital Group Inc.

Details
Name: FAT Brands Inc.
FAT
Exchange: NasdaqCM
Founded: 2017
$24,516,887
11,843,907
Website: http://www.fatbrands.com
Address: FAT Brands Inc.
9720 Wilshire Boulevard,
Suite 500,
Beverly Hills,
California, 90212,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NasdaqCM FAT Common Stock Nasdaq Capital Market US USD 23. Oct 2017
Number of employees
Current staff
Staff numbers
44
FAT Brands employees.
Industry
Restaurants
Consumer Services
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2020/04/03 00:36
End of day share price update: 2020/04/02 00:00
Last estimates confirmation: 2018/04/02
Last earnings filing: 2019/11/08
Last earnings reported: 2019/09/29
Last annual earnings reported: 2018/12/30


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

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.