I saw an article on "Seeking Alpha" that questioned ARKR's growth prospects. "Seeking Alpha" is an interesting website, with an interesting concept, BUT THEY NEED TO BRING UP QUALITY CONTROL & QUALITY OF SUBMITTED ARTICLES. If the author of this article had spent an hour or so in research, he would see that ARKR is going to have a LOT OF GROWTH.
ARKR is going to grow in calendar year 2011. As per the latest conference call, Mr. Weinstein stated that four leases have been signed and are in the process of opening and should be open by Fall/Winter 2011. He also stated there was a possibility of a FIFTH location.
All of these new locations are in the NYC metropolitan area. As such, I would presume these venues to be fairly large. This will be growth of about 20% in owned restaurant locations. Managed locations & fast food are the other portion of ARKR's business.
I would therefore GUESS that these 4 or 5 locations should grow ARKR's revenues about 10% when they are open.
ARKR has also expanded recently in Las Vegas. The new additions are a "burger bar" & a sports bar (former ESPN restaurant). I would think that each of these locations will grow ARKR by a percentage point or two.
If there is any growth in visitors to Vegas, ARKR's SSS numbers will be climbing higher too. This should be good for a few percentage points of growth.
Put it all together and you could be looking at as much as 20% top line growth. This is also what has been public knowledge in late January 2011. Will ARKR do some deals later in the year? I would be VERY surprised if they did not do at least one.
Mr. Weinstein also stated that they have been very careful with the balance sheet. He stated that EVEN WITH THE GROWTH, ARKR should have a BETTER balance sheet at the end of the year than in the beginning. That tells me that all the growth will be funded with internal cash flow AND that the buildout costs are being borne by the landlord or possibly with 3rd party partnerships.
End result is that there a good chance that ARKR will be growing revenue 20% in the upcoming 12 months. That is a pretty good growth rate in my book!
If revenue per share grows from $34 to $40, I think net earnings will grow substantially. If net earnings grows, this stock can INCREASE DIVIDENDS (hinted at in latest conference call). Increased earnings & dividends is going to lead to a MUCH higher share price.