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Ruth’s Hospitality (NasdaqGS:RUTH) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Ruth’s Hospitality Group, Inc. (NasdaqGS:RUTH) is scheduled to report Q3 earnings results on October 30, 2020.

The company is expected to report earnings of -$0.19/share on revenue of $55.061 million. The consensus earnings per share (EPS) of -$0.19/share is based on a poll of 5 analysts and represents a decline in eps of −225.3% over the same quarter last year, when the company reported earnings of $0.15/share.

The revenue forecast of $55.061 million based on a poll of 5 analysts implies a year-over-year (YoY) decline in revenue of −46.5%. Last year the company reported $103 million in revenue for the quarter.

Expected to report EPS of -$0.19/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $55.06 $103.01 −46.5%
EPS -$0.19 $0.15 −225.3%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, missed 1 quarters, and met expectations 2 quarters.

What are your expectations from Ruth’s Hospitality Group, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.53 -$0.48 9.1% Beat
Q1, 2020 $0.26 $0.09 −64.9% Missed
Q4, 2019 $0.50 $0.52 3.8% Beat
Q3, 2019 $0.10 $0.15 46.3% Beat
Q2, 2019 $0.31 $0.31 0% Met
Q1, 2019 $0.45 $0.45 0% Met
Q4, 2018 $0.49 $0.50 2.2% Beat
Q3, 2018 $0.11 $0.13 15.5% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 28, 2020, the stock price reacted by falling −13.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 31, 2020 $7.70 $6.70 −13.1% Decline
May 8, 2020 $9.16 $9.61 4.9% Increase
February 21, 2020 $23.83 $22.37 −6.1% Decline
November 1, 2019 $20.58 $24.28 18.0% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.02, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.02 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Ruth’s Hospitality Group, Inc. is currently trading at $11.33/share, down −6.5% for the day. The company is trading at approximately 44.0% of its 52-week high of $25.77/share. The company’s stock price is up 69.2% since the last earnings report and down −3.4% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 49.16 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:RUTH Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −159.69 and a forward P/E multiple of −21.41.

Ruth’s Hospitality Group, Inc.’s current share price also implies a price-to-book (P/B) multiple of 3.61. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 28, 2020
Stock Price (Current) $11.33
P/E Ratio −159.7x
P/E Ratio (Fwd) −21.4x
PEG Ratio 1.6
Total Debt / Total Capital 47.7%
Levered Free Cash Flow $18.108 million
EV / EBITDA 21.1x

Finbox

Ruth’s Hospitality Group, Inc. is a small-cap stock with a market capitalization of $388.1 million and a total enterprise value of $670.1 million. The company operates in the Consumer Discretionary sector and the Hotels, Restaurants & Leisure industry.

Ruth’s Hospitality Group, Inc., together with its subsidiaries, develops, operates, and franchises fine dining restaurants under the Ruth’s Chris Steak House name. The company’s restaurants offer food and beverage products to special occasion diners and frequent customers, as well as business clientele. As of February 28, 2020, it had approximately 150 company-owned and franchisee-owned restaurants worldwide. The company was formerly known as Ruth’s Chris Steak House, Inc. and changed its name to Ruth’s Hospitality Group, Inc. in May 2008. Ruth’s Hospitality Group, Inc. was founded in 1965 and is headquartered in Winter Park, Florida.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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