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Carrols Restaurant (NasdaqGS:TAST) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Carrols Restaurant Group, Inc. (NasdaqGS:TAST) is scheduled to report Q3 earnings results on November 5, 2020.

The company is expected to report earnings of $0.12/share on revenue of $403.9 million. The consensus earnings per share (EPS) of $0.12/share is based on a poll of 4 analysts and represents a growth in eps of 227.8% over the same quarter last year, when the company reported earnings of -$0.09/share.

The revenue forecast of $403.9 million based on a poll of 5 analysts implies a year-over-year (YoY) growth in revenue of 0.4%. Last year the company reported $402.3 million in revenue for the quarter.

Expected to report EPS of $0.12/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $403.91 $402.35 0.4%
EPS $0.12 -$0.09 227.8%

Earnings Call Trends

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

What are your expectations from Carrols Restaurant Group, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.01 $0.16 1,700.0% Beat
Q1, 2020 -$0.44 -$0.38 14.3% Beat
Q4, 2019 -$0.05 -$0.12 -133.9% Missed
Q3, 2019 $0.06 -$0.09 −258.0% Missed
Q2, 2019 $0.12 $0.07 −41.4% Missed
Q1, 2019 -$0.17 -$0.29 -69.6% Missed
Q4, 2018 $0.08 $0.05 −40.2% Missed
Q3, 2018 $0.09 $0.09 0% Met

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 increasing 4.5%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $6.60 $6.90 4.5% Increase
May 7, 2020 $3.01 $4.22 40.4% Increase
February 25, 2020 $5.13 $4.20 −18.1% Decline
November 7, 2019 $7.54 $7.57 0.4% 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 −2.53, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.53 implies a 0.6% chance of earnings manipulation.

Fundamentals And Technical Analysis

Carrols Restaurant Group, Inc. is currently trading at $5.85/share, down −5.5% for the day. The company is trading at approximately 69.1% of its 52-week high of $8.47/share. The company’s stock price is down −15.2% since the last earnings report and down −13.1% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 37.08 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:TAST Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −9.92 and a forward P/E multiple of −1,297.66.

Carrols Restaurant Group, Inc.’s current share price also implies a price-to-book (P/B) multiple of 1.06. The following table summarizes some other key fundamental ratios:

Data as of November 1, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 28, 2020
Stock Price (Current) $5.85
P/E Ratio −9.9x
P/E Ratio (Fwd) −1,297.7x
PEG Ratio 0.1
Total Debt / Total Capital 80.6%
Levered Free Cash Flow -$47.465 million
EV / EBITDA 21.2x

Finbox

Carrols Restaurant Group, Inc. is a small-cap stock with a market capitalization of $308.4 million and a total enterprise value of $1.618 billion. The company operates in the Consumer Discretionary sector and the Hotels, Restaurants & Leisure industry.

Carrols Restaurant Group, Inc., through its subsidiaries, operates as a restaurant company in the United States. The company operates as a Burger King franchisee. As of December 29, 2019, it had, as franchisee, 1,036 Burger King restaurants located in 23 Northeastern, Midwestern, and Southeastern states; and 65 Popeyes restaurants in seven Southeastern states. The company was founded in 1960 and is headquartered in Syracuse, New York.

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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