Noble initiates on small-cap restaurant stock Twin Hospitality with 150% upside
The fair value of shares of small-cap restaurant operator Twin Hospitality Group is $10 apiece, or 154% above current quotes, Noble Capital Markets estimates in a coverage initiation report on the company. The analysts say the company has considerable scope to expand, both by adding new restaurants and by tightening operations.
Details
Noble has initiated coverage of Twin Hospitality with an “outperform” rating and target price of $10 per share, for 154% upside versus the October 24 close.
Twin Hospitality was spun off from FAT Brands in January and listed, which gave it room to pursue its own growth strategy, the analysts said.
The company controls two concepts: Smokey Bones steakhouses in the U.S. and Twin Peaks sports bars in the U.S. and Mexico, which it operates and franchises. Noble highlights the attractive unit economics as a key strength. In 2024, average unit volume (AUV) for Twin Peaks was $5.3 million, versus the $4.06 million average for casual dining.
Twin Peaks' AUV places it second only to the fine dining category. Overall, Noble believes "the Company has significant growth opportunity through both the opening of new Twin Peaks locations as well as operational improvement."
Outlook for company
For the second quarter, Twin Hospitality reported a 4.1% year-over-year drop in revenue to $87.8 million and a near-doubling of its net loss to $20.8 million. The figures reflect “some short-term pressure,” CEO Kim Boerema said at the time.
He said the company is “acting with urgency around six clear priorities”: focusing on the fundamentals of great operations; reducing complexity and eliminating redundant systems; sharpening cost discipline; streamlining and strengthening the menu offerings; taking a measured, market-informed approach to pricing; and positioning the company to continue its dynamic growth. These steps, Boerema argues, are "the foundation for improving execution, rebuilding momentum, and delivering long-term value." No specific figures were given.
The AI translation of this story was reviewed by a human editor.
