MTY Food Group (MTY) AI Stock Analysis

• Market Cap: $926.32M
• Dividend Yield: 2.98%
• Average Volume (3M): 85.40K
• Price to Earnings (P/E): 39.6
• Beta (1Y): 0.84
• Revenue Growth: -0.83%
• EPS Growth: -77.91%
• Country: CA
• Employees: 7,632
• Sector: Consumer Cyclical
• Sector Strength: 55
• Industry: Restaurants
• EPS (TTM): 0.94
• Shares Outstanding: 23,192,862
• 10 Day Avg. Volume: 77,269
• 30 Day Avg. Volume: 85,402
• PEG Ratio: 4.43
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.86
• Price to Cash Flow (P/CF): 5.70
• P/FCF Ratio: 4.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$53.58
• Price Target Upside: 36.92% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

MTY Food Group's operational strengths and cash flow generation are offset by declining revenue growth and high leverage. The bearish technical outlook and high P/E ratio suggest caution, though strategic initiatives like dividend increases and digital sales growth offer potential upside.

MTY Food Group Business Overview & Revenue Model

Company Description

MTY Food Group Inc. franchises and operates quick-service, fast-casual, and casual dining restaurants in Canada, the United States, and internationally. The company also sells retail products under a multitude of banners. As of November 30, 2021, the company had 6,719 locations comprising 6,603 franchised, 23 joint ventures, and 93 corporate locations. The company was formerly known as iNsu Innovations Group Inc. and changed its name to MTY Food Group Inc. in July 2003. MTY Food Group Inc. was founded in 1979 and is headquartered in Saint-Laurent, Canada.

How the Company Makes Money

MTY Food Group primarily makes money through franchise fees and royalties collected from its franchisees. The company generates revenue by charging initial franchise fees to new restaurant owners and ongoing royalties based on a percentage of each franchise's sales. Additionally, MTY benefits from supply chain agreements, where it may receive income from distributing food and other products to its franchise locations. The company's growth is bolstered by strategic acquisitions, expanding its brand portfolio and increasing market presence, and by maintaining strong relationships with franchisees to ensure brand consistency and customer satisfaction.

MTY Food Group Financial Statement Overview

Summary

MTY Food Group demonstrates strong operational efficiency, with healthy EBIT and EBITDA margins. However, the decline in net profit margin and revenue growth raises concerns. The high debt-to-equity ratio suggests significant leverage, though cash flow metrics reveal solid cash generation capabilities. Overall, the company exhibits potential for growth but faces challenges in managing financial leverage and improving revenue.

Income Statement

The income statement shows a stable gross profit margin at 33.53% TTM, with an EBIT margin of 23.58% indicating strong operational efficiency. However, the net profit margin decreased to 2.08% TTM, reflecting potential issues in managing non-operational costs. Revenue growth is declining, with a decrease from the previous year, which is a concern.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio of 1.52, which indicates significant leverage and potential financial risk. However, the equity ratio is stable at 31.01%, suggesting a reasonable balance between equity and assets. ROE stands at 3.01% TTM, showing limited efficiency in generating returns from equity.

Cash Flow

The cash flow statement highlights a strong operating cash flow to net income ratio of 8.48, indicating robust cash generation relative to net income. Free cash flow grew by 16.42% over the previous year, suggesting effective capital management. However, free cash flow to net income is high, indicating reliance on cash flow to sustain net income.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.16B	1.17B	716.52M	551.90M	511.12M
	Gross Profit
419.18M	340.98M	255.40M	300.62M	276.61M
	EBIT
0.00	181.25M	133.58M	124.17M	81.83M
	EBITDA
165.34M	263.02M	165.60M	169.80M	14.65M
	Net Income Common Stockholders
24.17M	104.08M	74.82M	85.64M	-36.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
50.41M	58.90M	59.48M	61.23M	44.30M
	Total Assets
2.59B	2.68B	2.33B	1.90B	2.01B
	Total Debt
1.22B	1.30B	1.08B	834.28M	1.02B
	Net Debt
1.17B	1.24B	1.02B	773.04M	974.99M
	Total Liabilities
1.78B	1.87B	1.60B	1.26B	1.43B
	Stockholders Equity
801.84M	811.41M	723.41M	647.64M	581.75M
Cash Flow		Free Cash Flow
177.08M	152.42M	130.14M	132.54M	128.03M
	Operating Cash Flow
204.81M	184.59M	142.80M	139.30M	133.65M
	Investing Cash Flow
-23.54M	-319.66M	-258.42M	7.20M	-12.11M
	Financing Cash Flow
-186.78M	135.94M	105.30M	-129.58M	-126.37M

MTY Food Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 39.13
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MTY, the sentiment is Negative. The current price of 39.13 is below the 20-day moving average (MA) of 41.22, below the 50-day MA of 43.98, and below the 200-day MA of 44.93, indicating a bearish trend. The MACD of -0.97 indicates Negative momentum. The RSI at 37.65 is Neutral, neither overbought nor oversold. The STOCH value of 25.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:MTY.

MTY Food Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BPF.UN	74 Outperform		11.40	11.40%	7.31%	0.64%	8.65%
KEG.UN	67 Neutral		18.21	8.07%	8.40%	-2.67%	-66.51%
MTY	61 Neutral	$926.32M	39.62	3.10%	2.98%	-0.83%	-77.91%
Sector *	59 Neutral	$11.76B	10.11	-0.70%	3.92%	1.27%	-16.30%

MTY Food Group Corporate Events

MTY Food Group Shows Resilience with Q1 2025 Financial Results

MTY Food Group reported a slight increase in normalized adjusted EBITDA for the first quarter of fiscal 2025, reaching $60.2 million. Despite challenges such as adverse weather affecting its US frozen treats segment, the company maintained stable same-store sales and plans to expand its footprint in the coming quarters. The company also emphasized its strong free cash flow growth and strategic share repurchases as part of its capital management strategy.

Spark’s Take on TSE:MTY Stock

According to Spark, TipRanks’ AI Analyst, TSE:MTY is a Neutral.

MTY Food Group shows strengths in operational efficiency and cash flow generation, coupled with a commitment to shareholder returns through dividends. However, significant leverage, declining revenue growth, and recent impairment charges pose risks. The technical outlook is currently bearish, and valuation metrics suggest the stock may be overvalued. Despite these challenges, strategic initiatives like digital sales expansion and net positive location growth offer potential upside.

To see Spark’s full report on TSE:MTY stock, click here.

MTY Food Group to Discuss Q1 Results in Upcoming Conference Call

MTY Food Group Inc. announced it will hold a conference call on April 11, 2025, to discuss its first-quarter results. This event is significant for analysts and investors as it provides insights into the company’s financial performance and strategic direction, potentially impacting stakeholder decisions.

MTY Food Group Reports Stable Q4 2024 Amid Expansion

MTY Food Group reported stable financial performance in Q4 2024, with normalized adjusted EBITDA remaining relatively steady at $59.4 million and system sales increasing by 2% due to organic growth. The company opened 13 new locations, emphasizing the strength of its franchising segment with an 8% increase in normalized adjusted EBITDA. Despite these positive trends, MTY experienced a net loss attributable to owners of $55.3 million, contrasting with a profit in the same quarter of the previous year. Key activities included repurchasing shares and making debt repayments, indicating ongoing efforts to manage financial obligations and shareholder value.

MTY Food Group Schedules Q4 Results Conference Call

MTY Food Group Inc announced that it will hold a conference call on February 14, 2025, to discuss its fourth-quarter results. This call is open to analysts, investors, and interested parties, providing a platform for stakeholders to gain insights into the company’s financial performance and strategic direction.

MTY Food Group Increases Quarterly Dividend by 18%

MTY Food Group has announced an 18% increase in its quarterly dividend to 33.0¢ per share, reflecting its strong financial position and commitment to shareholder value. This marks the twelfth increase since its initial dividend declaration in 2010, emphasizing the company’s strategic growth initiatives and sustainable long-term business model.

MTY Group Foundation’s Successful First Year of Community Support

In its first year, the MTY Group Foundation successfully raised over $140,000 to support community initiatives, including significant contributions to the Breakfast Club of Canada and The Montreal Children’s Hospital Foundation. Major fundraising events included a golf tournament and the ‘Pedal for Kids’ event, while employees also participated in smaller initiatives, highlighting MTY’s dedication to community engagement and social responsibility.