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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#826
Positioning
Market Dominance
Retail Trade
Restaurants, Hotels, Motels
$446M
Eric Gatoff
Nathan's Famous, Inc. operates in the foodservice industry. The company owns and franchises restaurants under the brand name. It also has license agreements for the manufacture, distribution, marketing, and sale of hot dogs, sausages, corned beef products. As of March 28, 2021, its restaurant system consisted of 4 company-owned units in the New York City metropolitan area.
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Dates updated upon official exchange announcement.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = NATH ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$ARCO Arcos Dorados Holdings Inc. | 73 | 85 | 89 | 65 | - | - | 29.1% | 5.1% | 46.8% | 7.3% | 3.3% | 3.2% | 3.4% | 153.0x | $1.5B | VS | |
$IMKTA INGLES MARKETS INC | 70 | 73 | 89 | 76 | 11.3x | 4.1x | 5.3% | 3.3% | 23.9% | 2.2% | 1.6% | -5.4% | 1.0% | 32.0x | $1.3B | VS | |
$SGU STAR GROUP, L.P. | 69 | 82 | 79 | 63 | - | - | 26.2% | 7.8% | 31.5% | 6.4% | 4.1% | 1.0% | 6.1% | 63.0x | $399M | VS | |
$EZPW EZCORP INC | 68 | 77 | 82 | 89 | 7.2x | 4.2x | 12.0% | 6.4% | 58.6% | 11.7% | 8.6% | 9.7% | 0.0% | 51.0x | $1.2B | VS | |
$HTHT H World Group Ltd | 68 | 91 | 44 | 84 | - | - | 24.9% | 4.9% | 100.0% | 21.8% | 13.0% | 6.2% | 2.9% | 45.0x | $101.1B | VS | |
$DDL Dingdong (Cayman) Ltd | 68 | 86 | 82 | 57 | - | - | 42.4% | 4.0% | 100.0% | 0.9% | 1.3% | 12.3% | 0.0% | 201.0x | $1.2B | VS | |
$SBH Sally Beauty Holdings, Inc. | 68 | 83 | 92 | 77 | 5.1x | 2.3x | 27.5% | 6.9% | 51.6% | 8.9% | 5.3% | -0.4% | 0.0% | 177.0x | $1.6B | VS | |
$SPH SUBURBAN PROPANE PARTNERS LP | 67 | 80 | 90 | 53 | - | 13.0x | 18.6% | 4.7% | 60.7% | 14.4% | 7.4% | 7.9% | 7.1% | 202.0x | $1.2B | VS | |
$IHG INTERCONTINENTAL HOTELS GROUP PLC /NEW/ | 67 | 63 | 81 | 67 | - | - | -29.5% | 13.1% | 58.6% | 40.7% | 27.4% | 6.8% | 1.3% | - | $21.5B | VS | |
$ROST ROSS STORES, INC. | 67 | 63 | 55 | 83 | 25.2x | 16.5x | 34.8% | 13.3% | 28.0% | 11.6% | 9.1% | 10.4% | 1.0% | 26.0x | $51.6B | VS | |
$NATH NATHANS FAMOUS, INC. | 59 | 57 | 58 | 52 | 17.8x | 12.9x | -136.0% | 45.6% | 34.5% | 20.5% | 13.5% | -23.4% | 1.8% | - | $446M | ||
| SECTOR BENCH | - | - | - | - | - | 21.4x | 9.1x | 8.9% | 2.9% | 36.2% | 3.9% | 1.6% | 3.8% | 0.0% | 0.6x | - | REF |
NATHANS FAMOUS, INC. (NATH) receives a "Hold" rating with a composite score of 58.6/100. It ranks #826 out of 7,333 stocks in our coverage universe and carries a 3-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Direct cash return
Eric Gatoff
Chief Executive Officer
Labor Force
130
57
23
83
Audit Verdict: Average governance indicators based on financial metrics.
No recent insider transactions available for NATH
In-line with peers — no strong momentum signal
Fair valuation relative to peers
Average quality profile
Low volatility — smoother ride and historically better risk-adjusted returns
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Retail Trade sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for NATH.
View All RatingsMaterial decline in asset turnover efficiency detected
| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 57 | 72 | -15DRAG |
| MOMENTUM | 52 | 51 | +1NEUTRAL |
| VALUATION | 58 | 65 | -7DRAG |
| INVESTMENT | 23 | 9 | +14ALPHA |
| STABILITY | 83 | 89 | -6DRAG |
| SHORT INT | 87 | 94 | -7DRAG |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROE proxy -136.0% (sector 8.9%)
GM 34% vs sector 36%, OM 21% vs sector 4%
Capital turnover N/A
Rev growth -23%, 11yr history
Interest coverage N/A
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
Our model assigns NATHANS FAMOUS, INC. a Hold rating, with a composite score of 58.6/100 and 3 out of 5 stars. Ranked #826 of 7,333 stocks, NATH presents a mixed quantitative picture — neither compelling enough to initiate new positions nor weak enough to warrant selling. Investors already holding may consider maintaining their position while monitoring for changes in the factor profile.
With a quality score of 57/100, NATH shows adequate but unremarkable business quality. The company reports a return on equity of -136.0% (sector avg: 8.9%), gross margins of 34.5% (sector avg: 36.2%), net margins of 13.5% (sector avg: 1.6%). This suggests the company generates acceptable returns but may lack the competitive positioning or operational efficiency to stand out from peers.
NATH's value score of 58/100 indicates the stock is fairly valued based on its current fundamentals. Key valuation metrics include a P/E ratio of 17.83x, an EV/EBITDA of 12.95x. At this level, neither a clear bargain nor overpriced, the stock's attractiveness depends more on forward growth expectations and qualitative factors.
NATHANS FAMOUS, INC.'s investment score of 23/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of -23.4% vs. a sector average of 3.8% and a return on assets of 45.6% (sector: 2.9%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
NATH demonstrates moderate momentum with a score of 52/100, suggesting a neutral price trend without strong directional conviction. Revenue growth stands at -23.4% year-over-year, while a beta of 0.52 reflects its sensitivity to broader market moves. Moderate momentum may indicate the stock is consolidating or transitioning between trends, warranting close monitoring of upcoming catalysts.
NATH shows good financial stability with a score of 83/100. Key stability metrics include a beta of 0.52. This suggests manageable leverage and moderate price volatility, making it appropriate for investors seeking a balance between growth potential and capital preservation.
NATH's short interest factor score of 87/100 indicates very low short selling activity relative to peers — a positive signal suggesting institutional investors see limited near-term downside. Specific risk factors include small-cap liquidity risk. As a small-cap company with a market capitalization of $446M, NATHANS FAMOUS, INC. benefits from the generally lower volatility and deeper liquidity associated with its size class.
NATH offers a modest dividend yield of 1.8%. While the income contribution is relatively small, even a small dividend signals management's commitment to shareholder returns and can serve as a signal of financial discipline.
NATHANS FAMOUS, INC. is a small-cap company in the Retail Trade sector, ranked #44 of 50 in its sector (12th percentile) and #826 of 7,333 overall (89th percentile). Key comparisons include ROE of -136.0% trailing the 8.9% sector median and operating margins of 20.5% above the 3.9% sector average. This bottom-quartile standing highlights significant competitive headwinds within the Retail Trade space.
While NATH currently exhibits a HOLD profile, superior opportunities exist within the RETAIL TRADE sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
View Top Retail Trade Alpha →Quant Factor Profile
Key factor gap
Short Int. (87) vs Investment (23) — closing this gap could shift the rating.
RANK #44 OF 50 IN CONSUMER DISCRETIONARY
EV/EBITDA 42% ABOVE SECTOR MEDIAN
ROE 1627% BELOW SECTOR MEDIAN
Gross Margin IN LINE WITH SECTOR BENCHMARKS
AUDIT DATA AS OF DEC 28, 2025 (Q3 FY2025)
We rate NATHANS FAMOUS, INC. (NATH) as a Hold with a composite score of 58.6/100 at a current price of $100.63. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.
The rating is primarily driven by strength in stability (83th percentile) and value (58th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (23th percentile) and momentum (52th percentile) tempers our overall conviction. We assign a No Moat rating (27/100), Low uncertainty, and Poor capital allocation.
Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
NATHANS FAMOUS, INC. holds a lower-quartile position (#44 of 50) within the Retail Trade sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 58.6/100 places it at rank #826 in our full 7,333-stock universe. At $446M in market capitalization, NATHANS FAMOUS, INC. is a small-cap player in the Retail Trade space, which limits certain scale advantages but may allow for more agile strategic execution.
Revenue contraction of -23% combined with momentum at the 52th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.
The margin cascade tells an important story: gross margins of 34% (-1.7pp vs sector) narrow to operating margins of 21% (+16.6pp vs sector) and net margins of 13.5%, yielding a gross-to-net conversion rate of 39%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.
At a current price of $100.63, NATHANS FAMOUS, INC. is trading near fair value based on current fundamentals. Our value factor score of 58/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.
The stock currently trades at a P/E of 17.8x (roughly in line with the sector median of 21.4x), EV/EBITDA of 12.9x (at a premium), P/S of 2.5x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.
Return on assets of 45.6% indicates efficient deployment of the full asset base, not just equity capital.
Revenue decline of -23% signals business deterioration — declining revenues make it difficult to grow into the current valuation and often precede further negative revisions.
Elevated short interest (87th percentile) indicates that sophisticated market participants are betting against the stock.
We assign a Low uncertainty rating to NATHANS FAMOUS, INC.. The company exhibits strong financial stability with a beta of 0.52, and a stability factor in the 83th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.
Specific risk factors that inform our assessment include: low beta of 0.52 — while defensive, this may indicate limited upside participation in bull markets. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 83th percentile and quality factor at the 57th percentile provide a quantitative summary of the overall risk landscape.
Key risk mitigants include: above-average stability (83th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.
We rate NATHANS FAMOUS, INC.'s capital allocation as Poor. Key concerns include low returns on equity (-136.0%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — NATHANS FAMOUS, INC. significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.
Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.
In summary, NATHANS FAMOUS, INC. receives a Hold rating with a composite score of 58.6/100 (rank #826 of 7,333). Our quantitative framework assigns a No Moat (27/100, trend: stable), Low uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 55/100.
Our analysis supports a neutral stance on NATHANS FAMOUS, INC.. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We do not assign NATHANS FAMOUS, INC. a meaningful economic moat, scoring 27/100 on our composite assessment. Current fundamentals do not demonstrate the kind of durable competitive advantages — such as superior returns on invested capital, margin superiority, or reinvestment efficiency — that would protect the company from competitive erosion over the long term. The highest-scoring pillar, margin superiority, reached only 14.9/20.
The strongest moat sources are margin superiority (14.9/20) and growth durability (6.8/20). GM 34% vs sector 36%, OM 21% vs sector 4%. Rev growth -23%, 11yr history. These pillars form the core of NATHANS FAMOUS, INC.'s competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include economic value creation (0/20) and reinvestment efficiency (0/20). ROE proxy -136.0% (sector 8.9%). Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect NATHANS FAMOUS, INC.'s moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include operating margins of 21% reflecting effective cost management, declining revenues (-23%) that pressure the earnings outlook. The margin cascade from 34% gross to 21% operating to 13.5% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that profit quality is adequate though not exceptional, with the quality factor at the 57th percentile.
The margin profile shows gross margins of 34%, operating margins of 21%, net margins of 13.5%. Return metrics include ROE of -136.0% and ROA of 45.6%. Relative to the Retail Trade sector, gross margins are 1.7 percentage points below the sector median of 36%, and ROE of -136.0% compares to a sector median of 8.9%.
The balance sheet reflects a dividend yield of 1.83%, revenue growth of -23%. Overall balance sheet health is adequate for the current business environment.
Above 50MA
37.18%
Net New Highs
+51081
Nathan's Famous' (NATH) overall topline in fourth-quarter fiscal 2024 benefits from revenue growth in all segments.
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Monteverde & Associates PC, a class action law firm, is investigating four merger transactions: Penumbra's sale to Boston Scientific, RAPT Therapeutics' sale to GSK, Nathan's Famous' sale to Smithfield Foods, and Lisata Therapeutics' sale to Smithfield Foods. The firm is seeking shareholders who may have concerns about these deals.
The Schall Law Firm is investigating potential breaches of fiduciary duty by Nathan's Famous directors and management following the company's announcement of acquisition by Smithfield Foods for $102 per share on January 21, 2026. Investors are encouraged to contact the firm to discuss their rights.
Smithfield Foods announced it will acquire Nathan's Famous for $102.00 per share in an all-cash transaction valued at approximately $450 million. The acquisition secures Smithfield's rights to the iconic Nathan's Famous brand into perpetuity and is expected to be immediately accretive to earnings. Smithfield anticipates achieving approximately $9 million in annual cost synergies by the second anniversary of closing.