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Noodles & Co. (NDLS) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Noodles & Co. (NDLS) closed the most recent trading day at $5.77, moving +0.87% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.06%. At the same time, the Dow added 0.16%, and the tech-heavy Nasdaq lost 0.13%.

Prior to today's trading, shares of the restaurant chain had lost 22.7% over the past month. This has lagged the Retail-Wholesale sector's loss of 1.4% and the S&P 500's loss of 2.95% in that time.

NDLS will be looking to display strength as it nears its next earnings release. On that day, NDLS is projected to report earnings of $0.07 per share, which would represent year-over-year growth of 75%. Our most recent consensus estimate is calling for quarterly revenue of $120.37 million, up 3.12% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.16 per share and revenue of $468.88 million. These totals would mark changes of +700% and +2.41%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for NDLS. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 4.08% lower. NDLS currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, NDLS is holding a Forward P/E ratio of 36.51. This represents a premium compared to its industry's average Forward P/E of 23.1.

Also, we should mention that NDLS has a PEG ratio of 3.65. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Retail - Restaurants stocks are, on average, holding a PEG ratio of 2.45 based on yesterday's closing prices.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 149, which puts it in the bottom 42% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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