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Red Robin Gourmet Burgers (RRGB) has been one of the worst performing restaurant stocks in recent years, but shares have rallied 53% in nine trading sessions as investors bet on a turnaround.

Right now, the company has a market cap around 127 million dollars. With 50 million of cash and 189 million in debt, the enterprise value is around 268 million.

Unlike burger chains Five Guys or Shake Shack, Red Robin also serves beer and liquor, and provides traditional table service.

For a while, Red Robin was an excellent business. The company went public in 2002 and grew for roughly 15 years.

But the business started to decline in 2015, and it’s never recovered.

Since 2015 same-restaurant sales appear to be roughly flat. Adjusted EBITDA peaked at $148 million. Right now, Red Robin is guiding for 53 to 58 million for full year 2022.

So it’s little surprise that Red Robin stock is down 91% from its all-time high.

And yet there is some logic to the recent rally.

These are personal opinions not financial advice and we have no position in Red Robin stock. For more detailed analysis visit our website overlookedalpha.com