KRUS - Kura Sushi's Growth Comes With Negative Caveats
2024-06-14 12:45:27 ET
Summary
- Kura Sushi operates revolving sushi bars in the US, and has grown the restaurant network aggressively.
- Profitability continues to be weak, partly due to growth-related expenses and a new restaurant base. Although margin improvements are likely, the industry's typical margins don't provide a very attractive outlook.
- With continuous high capex, cash flows are weak. The balance sheet provides capital for a couple of years, but improved profitability is needed in the midterm to fuel aggressive growth.
- The stock seems to be overvalued by a wide margin with my financial estimates.
Kura Sushi USA, Inc. (KRUS) operates a revolving sushi bar in the United States with the brand that’s already well known in Japan. The company tries to improve the customer experience with technology, including robot servers and QR tableside payment. The company is rapidly expanding throughout the country with the relatively well-received restaurant concept, and anticipates an entry into several new states in the next few quarters, as told in the June 2024 investor presentation ....
Kura Sushi's Growth Comes With Negative Caveats