Stereotaxis Inc. Message Board
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on Cinco de Mayo.
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Earnings are released the day after cinco de mayo!
Cinco de mayo is probably the best day of the year for Mexican restaurant sales. -
The stock is worth $72 a share and the math works out on a pv discounted basis based on 500 future stores. It is known what the future brings
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I guarantee you that the next 15 years brings 20% growth in Chuy's store base. It is a no brainer when you have 41 stores. Be like Warren Buffet and buy what you like and the long term growth and excellent management at Chuy's. The guy that wrote the short story article on Seeking Alpha went out of his way to to find information to scare investors. I will be he never stepped foot in a Chuy's and knows little about the restaurant business.
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How many stores do you think the Chuy's base can grow to. They only have 41 stores. There product is not a gimmick. I have surveyed at least 20 people who have ate at Chuy's (at random) and everyone of them speaks highly of Chuy's. They all say the food is good and prices are reasonable. What am I missing? Have you modeled out 500 stores in your valuation.
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So funds have been lined up to buy the stock at $33 a share, equal to about 20% of the total shares outstanding. That is outstanding, these institutional guys are no dummies.
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Really
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No - The institutional investors know that Chuy's has 15 years of 20% + growth. In an environment of long term bond rates that are 3%, that is significant. Do not focus on the current PE because they only have 41 stores and can grow the base to 500 stores. Solid management, fresh food. I took a survey of those I know and asked them about Chuy's and all thumbs up on food, experience, and pricing. Invest like Warren Buffet. Buy what you like - the brand.
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If you assume 41 restaurants and factor in 20%, the company reaches 500 stores in 12.6 years (compounded monthly growth rate assumption).
500 stores times average store revenue of $5 million = $2.5 billion annual revenue.
Let's compare to Darden, one of the largest restaurant companies. Darden has annual revenue of $8 billion and EBITDA of $1.063 billion (13.3% EBITDA margin). Chuy's should be able to acheive that based on its results as it grows out its model. The market cap of Darden is $6.477 billion, or 6x EBITDA.
On annual revenue of $2.5 billion, EBITDA margin of 13%, Chuy achieves EBITDA of $325 million and Chuy's has a market cap of $1.95 billion at an EBITDA multiple of 6x. If you discount the $1.95 billion back to today's PV (at an interest rate of 4%), the PV is $1.179 billion divided by 16,228,731 shares outstanding equals a today stock value of $72.64.
Management is experienced and conservative. They could try to grow the store base faster than 20% but they understand that controlled growth and quality is more important and hence are limiting growth to 20%. Moreover, the company does not believe in franchising as they want total control over the quality and operations. Wise.