Investment decisions

Red Robin Gourmet Burgers – Turnaround or value trap?

What is Red Robin Gourmet Burgers? $ RRGB

Red Robin is a small-cap player in the US restaurant industry. Founded in Seattle in 1969, the company has expanded nationwide, boasting 414 company-owned establishments and 91 franchises. Focused on the casual dinner segment, Red Robin is renowned for serving “high-quality burgers and Bottomless Steak Fries.”

After going public in 2002, Red Robin experienced substantial growth in the number of restaurants and revenues until 2015, the year when its market capitalization peaked at over $1250 million. However, since then, both financial results and share prices have been in an absolute decline, with the company’s current market cap standing at less than $150 million.

$RRGB number of restaurants

In September 2022, Red Robin appointed a new CEO, a former CEO of Texas Roadhouse, who launched a new strategic plan in early 2023 in an attempt to turn the business around.

Today, we analise Red Robin Gourmet Burgers to determine whether its potential turnaround represents a tremendous opportunity or if there are red flags that suggest it might be a value trap.

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