STKS Stock Forecast & Price Target

One Group Hospitality's guidance for first quarter 2025 indicates projected total revenue of between $835 million and $870 million, alongside anticipated improvement in consolidated same-store sales, signaling a potential stabilization after previous declines. The integration of Benihana and RA Sushi has positively impacted operating expenses relative to company-owned restaurant net revenue, suggesting enhanced operational efficiency and profitability potential. Furthermore, the company's ambitious growth plans, targeting 400 Benihana locations and 200 STK locations, alongside an expanded franchising strategy and exploration of non-traditional venues, underscore significant long-term growth prospects.

One Group Hospitality faces a negative outlook primarily due to declining same-store sales, which decreased by 4.3% in 4Q24 compared to a 19.3% year-over-year increase in 4Q23, reflecting ongoing challenges in industry traffic amid heightened economic uncertainty. Despite reporting a notable 147% year-over-year revenue increase in 4Q24, largely attributed to acquisitions, the reliance on strong consumer discretionary spending exposes the company to risks associated with economic downturns, including low consumer confidence and potential operational volatility. Additionally, the company’s ambitious unit growth strategy introduces further risks related to execution and operational inefficiencies, which could hinder its ability to achieve future sales and margin targets.