Noble rates international restaurant company ONE Group a ‘buy’

Noble Capital Markets has initiated coverage of ONE Group Hospitality, which owns restaurant chains and provides management services to hotels and casinos. It issued a “buy” rating on the stock with a target price implying nearly 70% upside. Last year is said to have marked a transformational period for the company and opened up significant growth opportunities.

Yesterday, April 23, the investment bank and advisory firm Noble Capital Markets launched coverage of ONE Group Hospitality with an “outperform” call. It set a target price of $5 per share, meaning 69% upside versus current market quotes. Yesterday, the stock closed at $2.96 per share, gaining just over 3% for the day.

ONE Group Hospitality operates upscale restaurants around the world and focuses on the rapidly growing “vibe dining” segment, which combines food service with a social experience, such as dancing and/or DJ performances, Noble writes.

The year 2024 was transformational for the company, Noble claims. In May, ONE Group announced the $365 million acquisition of Safflower Holdings Corp., which owns two restaurant chains through a subsidiary. The deal more than doubled ONE Group’s revenue and adjusted EBITDA, while also diversifying its customer base. In 2024, the company reported a 146.7% increase in revenue to $221.9 million, and a 147.6% jump in adjusted EBITDA to $30.3 million.

Noble forecasts that in 2025, the top line will grow 280%, and adjusted EBITDA 240%.

The acquisition significantly expanded ONE Group’s portfolio and gave the company a scale that would have taken years to achieve organically, according to Noble. Yet its growth potential remains healthy. Noble estimates that ONE Group could eventually operate over 600 locations, versus 167 today.

According to MarketWatch, four Wall Street analysts currently cover the stock: Three rate it a “buy,” while one has it as a “hold.” Their average target price is $5 per share.