On the surface, Muscle Maker, Inc. looks like your typical restaurant portfolio company. Yet, revenues have been on a tear over the last year, and it has nothing to do with their restaurants. But is this new golden goose enough to get traders excited… Or is this just another well-crafted pump? Muscle Maker, Inc. (NASDAQ: GRIL) 1-month trading range: $1.03 - $1.47 Typical average daily volume: 330K Float: ~ 14.9 million Muscle Maker, Inc. Does Muscle Maker, Inc. truly provide the ultimate in 'healthier for you' food choices? The company labels itself as a bastion of high-quality, nutritious meal options, spreading its reach across not just traditional spots but also infiltrating military bases, universities, ghost kitchens, and even direct-to-consumer ready-made meal prep services. They operate under several banners, including Muscle Maker Grill restaurants, Pokemoto Hawaiian Poke, and SuperFit Foods meal prep. Their social pages look legit. In fact, after scouring through the various websites the company has, everything looks to be on the up and up. Its menu offers healthier spins on traditional and not-so-traditional dishes, boasting ingredients such as grass-fed steak, lean turkey, chicken breast, Ahi tuna, salmon, shrimp, tofu, and plant-based options. Pokemoto is a Hawaiian Poke Bowl restaurant with locations in Connecticut, Massachusetts, Florida, Maryland, and Virginia. Visiting the website, I discovered the business offers franchising opportunities. 
Source: Instagram Lastly, there's SuperFit Foods, LLC, which does fresh-prepared subscription-based meal prep. Customers can choose from over 150 different meal plans that are shipped from their HQ Jacksonville, Florida. From the looks of it, GRIL is the real deal. However, the company is most bullish about Sadot, a new acquisition, and the company's cash cow. Sadot is a food supplier that claims to bridge the gap between rural farms and industrial centers globally. So does the business make money? Financials 
Source: Stock Analysis While this isn't the worst stock I've covered for you, but like many of them, there are several holes that need to be plugged. Here's some of the stuff that looks bad: - Negative Net Income: The company has failed to generate positive net income.
- Negative Operating Cash Flow: The company's operating cash flow is negative, meaning they burn cash every day they operate.
- High Operating Expenses: The operating expenses seem quite high relative to the revenue the company generates, which is eating into its profits and contributing to its operating losses, especially given their low gross margin.
- Increase in Debt: Debt growth shows the company is taking on more debt over time, increasing their interest expenses.
On the other hand, here are the bright spots: - Increasing Revenue: Revenues have grown significantly over the years. This is likely to addition of Sadot, which is taken the firm's revenues into the 9-figure territory annually.
- Increase in Cash & Equivalents: The company has a growing amount of cash and equivalents, which can help cover short-term liabilities and potential investment opportunities.
- Gross Margin Improvement: Although overall operating performance is negative, the company has improved gross margins over the years. This could suggest improvements in production efficiency or pricing power.
The company really shot itself in the foot in 2021, when it issued $22.79M. It dilluted shareholders. The stock has never recovered from that. In fact, hasn't seen $3 since then. And as long as their burning cash, it's likely another dillutution event is on the horizon. Promoter Activity I heard about GRIL from one promoter who likes sending text alerts and emails. They pointed out how the firm has generated over $470 million in revenues over the last three quarters. And how one analyst gave it a $5 price target. It talks about the launch of Sadot, the company's global food supply chain solutions provider. Moreover, how Sadot has achieved seven consecutive months above $50 million in revenue per month. The promoter received $10K to run a two-day promotional campaign from 7/25 to 7/26. Straight to the Facts GRIL shares did attract substantially more trading volume on the first day of the pump. However, the stock closed lower. While the Sadot story seems interesting, it's too confusing and difficult to understand. When speaking to penny stock traders, you've got to dumb it down. Unfortunately, this makes it hard for investors and traders to get excited about this stock. Always at your service, Baron Von Stocks | 
Post a Comment
Post a Comment