On Monday, William Blair initiated coverage on Pinstripes Holdings Inc (NYSE:PNST), an upscale dining and entertainment company, with an Outperform rating. The firm highlighted the company's diversified sales mix and strong average unit volumes (AUVs) as key factors in their positive outlook.
Pinstripes, founded by CEO Dale Schwartz in 2007, operates 16 locations across 10 states including Washington, D.C. The venues offer a combination of chef-driven Italian American cuisine and entertainment options such as bowling and bocce. The company's broad consumer appeal is demonstrated by its healthy AUVs, which reached $8.6 million in fiscal 2023.
The company's revenue streams are notably diversified, with 47% of its sales stemming from private events. Notably, nearly two-thirds of these events are corporate, which suggests a strong business-to-business component to Pinstripes' operations. This is complemented by the high-margin games segment, which accounts for 21% of the company's sales.
Pinstripes has also been successful in attracting customers during the happy hour and late-night dayparts, which together represent 54% of total sales. This indicates a robust performance during times that are typically profitable for dining and entertainment businesses. The company's ability to generate above-average sales during these periods contributes to the positive assessment by William Blair.
InvestingPro Insights
As Pinstripes Holdings Inc (NYSE:PNST) garners a favorable outlook from William Blair, it's worth noting some of the financial metrics and market performance data that could influence investor perception. Pinstripes currently operates with a significant debt burden and is quickly burning through cash, which are critical factors for investors to consider.
Moreover, the company's stock price has experienced high volatility and has taken a substantial hit over various periods, including the last week, month, and six months, indicating a potential concern for stability-seeking investors.
From a valuation standpoint, Pinstripes has a market capitalization of $124.67 million and a negative price-to-earnings ratio of -3.12, reflecting the company's current lack of profitability. The revenue for the last twelve months as of Q3 2024 stands at $116.7 million, with a gross profit margin of 46.96%, showcasing the company's ability to maintain a relatively high margin despite its financial challenges.
These data points highlight the importance of closely monitoring Pinstripes' financial health and market performance.
Investors looking for deeper analysis and additional insights can find more InvestingPro Tips on Pinstripes at https://www.investing.com/pro/PNST. With 15 InvestingPro Tips available, including expectations on net income and liquidity concerns, subscribers can make more informed decisions. For those interested, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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