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Relative to Consumer Discretionary Sector Median (N=442)
Metric
NATH
Benchmark
P/E Ratio
17.8x
-27%
EV/EBITDA
12.9x
+163%
Price / Book
-24.2x
Implied Value Audit
OVERVALUED
Implied Fair Value (vs Sector)
-72.4%
$28.05Spot: $101.69
Spot
Implied
-50% Delta+50% Delta
Relative valuation derived from Consumer Discretionary sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
-136.0%
Sector: 6.2%
Dividend Analysis audit
GROWTH
1.83%
Trailing Yield
$1.83
Per $100 Invested
Modest dividend — capital prioritized for reinvestment.
Est. Payout Ratio
33%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, NATHANS FAMOUS, INC. (NATH) receives a "Hold" rating with a composite score of 46.0/100, ranked #821 out of 4446 stocks. Key factor scores: Quality 50/100, Value 42/100, Momentum 44/100. This is quantitative analysis only — not investment advice.
NATHANS FAMOUS, INC. (NATH) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does NATHANS FAMOUS, INC. Do?
Nathan's Famous, Inc., together with its subsidiaries, operates in the foodservice industry. The company owns and franchises restaurants under the Nathan's Famous brand name, as well as sells products bearing the Nathan's Famous trademarks through various channels of distribution. It also has license agreements for the manufacture, distribution, marketing, and sale of Nathan's Famous branded hot dogs, sausages, and corned beef products in refrigerated consumer packages to be resold through retail channels, such as supermarkets, groceries, mass merchandisers, and club stores; and other Nathan's Famous branded refrigerated meat products in consumer packages to be resold through retail channels. In addition, the company has license agreements to manufacture Nathan's Famous branded hot dog and sausage products in bulk for use in the food service industry; for supplying Nathan's Famous natural casing and skinless hot dogs in bulk for use in the Nathan's Famous restaurant system; to manufacture proprietary spices; to manufacture and sell various products, including mustard, salsa, sauerkraut, and pickles; to produce and sell French fries and onion rings for retail sale; and to manufacture and sell miniature bagel dogs, franks-in-a-blanket, and other hors d'oeuvres through club stores, supermarkets, and other retail food stores. Further, the company sells Nathan's products directly to end users or to various foodservice distributors, as well as provides Arthur Treacher's brand fish fillets. As of March 28, 2021, its restaurant system consisted of 4 company-owned units in the New York City metropolitan area; and 213 franchised units in 19 states and 8 foreign countries. Nathan's Famous, Inc. was founded in 1916 and is based in Jericho, New York. NATHANS FAMOUS, INC. (NATH) is classified as a small-cap stock in the Consumer Discretionary sector, specifically within the Restaurants, Hotels, Motels industry. The company is led by CEO Eric Gatoff and employs approximately 130 people, headquartered in Jericho, New York. With a market capitalization of $412M, NATH is one of the notable companies in the Consumer Discretionary sector.
NATHANS FAMOUS, INC. (NATH) Stock Rating — Hold (April 2026)
As of April 2026, NATHANS FAMOUS, INC. receives a Hold rating with a composite score of 46.0/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.NATH ranks #821 out of 4,446 stocks in our coverage universe. Within the Consumer Discretionary sector, NATHANS FAMOUS, INC. ranks #56 of 442 stocks, placing it in the top quartile of its Consumer Discretionary peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
NATH Stock Price and 52-Week Range
NATHANS FAMOUS, INC. (NATH) currently trades at $101.69. The stock lost $0.13 (0.1%) in the most recent trading session. The 52-week high for NATH is $118.50, which means the stock is currently trading -14.2% from its annual peak. The 52-week low is $88.00, putting the stock 15.6% above its annual trough. Recent trading volume was 16K shares, suggesting relatively thin trading activity.
Is NATH Overvalued or Undervalued? — Valuation Analysis
NATHANS FAMOUS, INC. (NATH) carries a value factor score of 42/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 17.77x, compared to the Consumer Discretionary sector average of 24.47x — a discount of 27%. The price-to-sales ratio is 2.46x, compared to 0.27x for the average Consumer Discretionary stock. On an enterprise value basis, NATH trades at 12.92x EV/EBITDA, versus 4.91x for the sector.
Overall, NATH's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
NATHANS FAMOUS, INC. Profitability — ROE, Margins, and Quality Score
NATHANS FAMOUS, INC. (NATH) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is -136.0%, compared to the Consumer Discretionary sector average of 6.2%, which is below typical expectations for high-quality companies. Return on assets (ROA) comes in at 45.6% versus the sector average of 2.5%.
On a margin basis, NATHANS FAMOUS, INC. reports gross margins of 34.5%, compared to 36.9% for the sector. The operating margin is 20.5% (sector: 3.8%). Net profit margin stands at 13.5%, versus 2.1% for the average Consumer Discretionary stock. Revenue growth is running at -23.4% on a trailing basis, compared to 3.3% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
NATH Debt, Balance Sheet, and Financial Health
NATHANS FAMOUS, INC. has a debt-to-equity ratio of -835.0%, compared to the Consumer Discretionary sector average of 89.0%. The low leverage indicates a conservative balance sheet with significant financial flexibility. The current ratio is 2.73x, indicating strong short-term liquidity. Total debt on the balance sheet is $49M.
NATH has a beta of 0.45, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for NATHANS FAMOUS, INC. is 84/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
NATHANS FAMOUS, INC. Revenue and Earnings History — Quarterly Trend
In TTM 2026, NATHANS FAMOUS, INC. reported revenue of $168M and earnings per share (EPS) of $0.75. Net income for the quarter was $23M. Gross margin was 34.5%. Operating income came in at $35M.
In Q3 2026, NATHANS FAMOUS, INC. reported revenue of $34M and earnings per share (EPS) of $0.75. Net income for the quarter was $3M. Gross margin was 32.6%. Operating income came in at $5M.
In Q2 2026, NATHANS FAMOUS, INC. reported revenue of $46M and earnings per share (EPS) of $1.27. Net income for the quarter was $5M. Gross margin was 29.1%. Revenue grew 11.1% year-over-year compared to Q2 2025. Operating income came in at $8M.
In Q1 2026, NATHANS FAMOUS, INC. reported revenue of $47M and earnings per share (EPS) of $2.18. Net income for the quarter was $9M. Gross margin was 39.5%. Revenue grew 5.0% year-over-year compared to Q1 2025. Operating income came in at $13M.
Over the past 8 quarters, NATHANS FAMOUS, INC. has demonstrated a growth trajectory, with revenue expanding from $139M to $168M. Investors analyzing NATH stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
NATH Dividend Yield and Income Analysis
NATHANS FAMOUS, INC. (NATH) currently pays a dividend yield of 1.8%. At this yield, a $10,000 investment in NATH stock would generate approximately $$183.00 in annual dividend income. The net margin of 13.5% provides reasonable coverage for the dividend, though investors should monitor payout sustainability.
NATH Momentum and Technical Analysis Profile
NATHANS FAMOUS, INC. (NATH) has a momentum factor score of 44/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 38/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 16/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
NATH vs Competitors — Consumer Discretionary Sector Ranking and Peer Comparison
Comparing NATH against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full NATH vs S&P 500 (SPY) comparison to assess how NATHANS FAMOUS, INC. stacks up against the broader market across all factor dimensions.
NATH Next Earnings Date
No upcoming earnings date has been announced for NATHANS FAMOUS, INC. (NATH) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy NATH? — Investment Thesis Summary
NATHANS FAMOUS, INC. presents a balanced picture with arguments on both sides. Low volatility (stability score 84/100) reduces downside risk.
In summary, NATHANS FAMOUS, INC. (NATH) earns a Hold rating with a composite score of 46.0/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on NATH stock.
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Institutional Research Dossier
NATHANS FAMOUS, INC. (NATH) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain a Hold rating on Nathan's Famous, Inc. (NATH). While the company possesses a recognizable brand and operates within a relatively stable consumer segment, its high valuation multiples, recent revenue decline, and negative ROE raise concerns about its future performance. The company's reliance on licensing agreements and franchise operations, while asset-light, also exposes it to risks associated with brand management and franchisee performance, making a more bullish stance difficult to justify at current levels.
The primary takeaway is that NATH's current market capitalization appears to be pricing in significant future growth that is not yet supported by its recent financial performance. The company's ability to revitalize revenue growth, improve profitability, and effectively manage its debt will be critical in determining whether it can justify its premium valuation. Investors should closely monitor these factors before considering a more positive outlook on the stock.
Business Strategy & Overview
Nathan's Famous operates a multi-faceted business model centered around its iconic brand. The core of its strategy involves owning and franchising restaurants, primarily under the Nathan's Famous banner. These restaurants serve as a direct point of sale for its signature hot dogs and other menu items. However, a significant portion of the company's revenue is derived from licensing agreements. These agreements allow third parties to manufacture, distribute, and sell Nathan's Famous branded products through retail channels like supermarkets and club stores, as well as to foodservice distributors.
This licensing strategy is asset-light, allowing Nathan's to expand its brand presence without significant capital expenditure. The company also leverages licensing for specific product categories, such as spices, sauerkraut, and even French fries, further diversifying its revenue streams. The company's strategic focus appears to be on maximizing brand reach through these licensing arrangements, while maintaining a smaller footprint of company-owned and franchised restaurants. The Arthur Treacher's brand, while a smaller component, represents an attempt to diversify beyond hot dogs and leverage existing infrastructure.
The foodservice industry is highly competitive, with numerous national and regional chains vying for market share. Nathan's competes with other fast-food restaurants, hot dog vendors, and broader consumer packaged goods companies in the retail channel. The company's success hinges on maintaining brand recognition, ensuring product quality across its licensed products, and effectively managing its franchise network. The company's ability to innovate with new menu items and adapt to changing consumer preferences will also be crucial for long-term growth.
The company's product pipeline is not explicitly detailed in the provided data, but it can be inferred that new product development primarily occurs through its licensing partners. Nathan's likely focuses on maintaining brand standards and approving new product formulations proposed by its licensees. The company's strategic positioning relies heavily on its brand heritage and association with New York City, which it leverages to differentiate itself from competitors. However, this reliance also makes it vulnerable to shifts in consumer tastes and preferences.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
-23.4%
Sector: 3.3%
-809% VS SCTR
Economic Moat Analysis
Nathan's Famous possesses a Narrow economic moat, primarily derived from its brand intangible asset. The Nathan's Famous brand, established in 1916, carries significant recognition and nostalgia, particularly in the New York City metropolitan area and among consumers familiar with its Coney Island heritage. This brand recognition allows Nathan's to command a premium price and secure favorable licensing agreements. However, the moat is narrow because the hot dog market is relatively fragmented, and consumers have numerous alternatives, including other hot dog brands, fast-food restaurants, and home-cooked meals.
The company's licensing model, while asset-light, also limits its control over product quality and brand consistency. While Nathan's likely has quality control measures in place, the reliance on third-party manufacturers introduces the risk of brand dilution if licensees fail to maintain standards. Furthermore, the switching costs for consumers are low, as they can easily switch to alternative hot dog brands or other food options. This lack of customer stickiness weakens the company's competitive advantage.
Nathan's does not appear to benefit from significant cost advantages or efficient scale. The hot dog manufacturing process is relatively standardized, and there are numerous suppliers capable of producing high-quality hot dogs. While Nathan's may have some proprietary spice blends or recipes, these are unlikely to create a substantial cost advantage. The company's restaurant footprint is also relatively small, limiting its ability to achieve economies of scale in purchasing and operations.
The absence of strong network effects further weakens Nathan's moat. The value of the Nathan's brand does not increase significantly as more consumers purchase its products. While brand recognition is important, it does not create a self-reinforcing cycle of growth and competitive advantage. Therefore, while the Nathan's brand provides a degree of competitive protection, it is not sufficient to create a Wide economic moat. The company's reliance on licensing and the ease with which consumers can switch to alternatives limit its pricing power and long-term profitability.
Financial Health & Profitability
Nathan's Famous' financial health presents a mixed picture. While the company exhibits strong current ratio of 2.73, indicating a healthy liquidity position, its revenue growth has been concerning. The TTM revenue shows a significant decline of -23.4% compared to the sector average of 3.2%. This decline raises questions about the company's ability to maintain its market share and brand relevance. The quarterly financial history reveals fluctuating revenue and net income, with Q3 FY2026 showing a substantial drop in revenue compared to previous quarters.
The company's profitability metrics, such as gross margin (34.5%), operating margin (20.5%), and net margin (13.5%), are generally strong compared to the sector averages. This suggests that Nathan's is able to effectively manage its costs and generate profits from its revenue. However, the negative ROE of -136.0% is a significant red flag, indicating that the company is not effectively utilizing its equity to generate returns. This could be due to a number of factors, including high debt levels or inefficient asset management.
The company's debt-to-equity ratio is reported as -835.00, which is an anomaly and likely indicates a data error or a unique accounting situation. It's crucial to investigate the composition of the company's equity and debt to understand the true leverage situation. The company's EBITDA of $5.36M suggests a reasonable level of operating profitability, but the high EV/EBITDA multiple of 21.5x compared to the sector average of 5.3x indicates that the market is pricing in significant future growth that may not be justified by the company's recent performance.
The absence of free cash flow data makes it difficult to assess the company's ability to generate cash from its operations. Free cash flow is a critical metric for evaluating a company's financial health, as it indicates the amount of cash available for reinvestment, debt repayment, and shareholder returns. The lack of this data is a significant limitation in our analysis. Overall, Nathan's Famous' financial health is questionable, with strong profitability metrics offset by declining revenue, negative ROE, and a high valuation. Further investigation is needed to fully understand the company's financial situation.
Valuation Assessment
Nathan's Famous' valuation appears stretched based on several key metrics. The company's P/E ratio of 134.0x is significantly higher than the consumer discretionary sector average of 28.0x, suggesting that the stock is overvalued relative to its earnings. This high P/E ratio could be justified if the company were experiencing rapid earnings growth, but the recent revenue decline and negative ROE cast doubt on its growth prospects.
The EV/EBITDA multiple of 21.5x is also significantly higher than the sector average of 5.3x, further indicating that the stock is expensive relative to its operating profitability. This high multiple suggests that investors are expecting significant future EBITDA growth, which may not be realistic given the company's recent performance. The absence of free cash flow data makes it difficult to assess the company's valuation based on its cash flow generation.
Comparing Nathan's Famous' valuation to its historical performance is challenging due to the limited data available. However, the recent decline in revenue and the negative ROE suggest that the company's financial performance has deteriorated, which would typically warrant a lower valuation. The market appears to be pricing in a turnaround in the company's performance, but there is no guarantee that this will occur.
The company's market capitalization of $411.41M seems high relative to its revenue of $34.31M and net income of $3.08M. A more reasonable valuation would likely be based on a lower P/E ratio and EV/EBITDA multiple, reflecting the company's declining revenue and negative ROE. Overall, Nathan's Famous' valuation appears to be based on optimistic assumptions about its future growth and profitability, which are not supported by its recent financial performance. The stock is likely overvalued at current levels.
Risk & Uncertainty
Nathan's Famous faces several specific risks that could negatively impact its business and financial performance. One of the primary risks is its reliance on licensing agreements. While this model is asset-light, it also exposes the company to the risk of brand dilution if licensees fail to maintain product quality or adhere to brand standards. Any negative publicity or product recalls associated with licensed products could damage the Nathan's Famous brand and reduce consumer demand.
Another significant risk is competition within the foodservice industry. The hot dog market is relatively fragmented, and Nathan's faces competition from other hot dog brands, fast-food restaurants, and consumer packaged goods companies. The company's ability to maintain its market share and brand relevance depends on its ability to differentiate itself from competitors and adapt to changing consumer preferences. Failure to innovate with new menu items or effectively market its products could lead to a decline in sales and profitability.
The company's debt level of $48.73M also poses a risk, particularly in light of its declining revenue and negative ROE. High debt levels can constrain the company's ability to invest in growth initiatives or respond to competitive pressures. The company's ability to service its debt depends on its ability to generate sufficient cash flow, which could be challenging given its recent financial performance. Furthermore, the company's small size and limited resources make it vulnerable to economic downturns and unexpected events.
Bulls Say / Bears Say
The Bull Case
BULL VIEWNathan's Famous' iconic brand and long history provide a strong foundation for future growth, particularly through expansion of its licensing agreements and strategic partnerships.
BULL VIEWThe company's high operating and net margins demonstrate its ability to generate profits from its revenue, suggesting that it can effectively manage its costs and improve its financial performance.
The Bear Case
BEAR VIEWNathan's Famous' high valuation multiples, particularly its P/E ratio and EV/EBITDA multiple, are not justified by its recent revenue decline and negative ROE, indicating that the stock is overvalued.
BEAR VIEWThe company's reliance on licensing agreements exposes it to the risk of brand dilution and reduced control over product quality, potentially damaging its reputation and consumer demand.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score NATH and 4,400+ other equities.
NATHANS FAMOUS, INC. exhibits a 93% valuation discount relative to institutional benchmarks. This represents a constructive entry window based on current multiples.
Return on Assets
Efficiency of asset utilization
45.6%
Sector: 2.5%
Gross Margin
Pricing power and cost efficiency
34.5%
Sector: 36.9%
Operating Margin
Core business profitability
20.5%
Sector: 3.8%
Net Margin
Bottom-line profitability
13.5%
Sector: 2.1%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.00%
Yield Delta—
Income Projection audit
A $10,000 investment would generate approximately $183 annually in dividends at the current trailing rate.
