– q1’26 BEGINS TO DEMONSTRATE CASH FLOW POWER, ALLOWING FOR UPWARD RE-RATING OF COMMON STOCK
Summary and Conclusion
The One Group Hospitality (STKS) reported continued progress in Q4’25 and the year as a whole. Broadly speaking, the first full year owning the Benihana (now their largest division) seems to have provided a productive base for predictable growth. Also within the last year, STK’s menu was adjusted to appeal to increasingly value driven diners, while the Grill division (their weakest, and smallest, division) was pruned and should be less of a drag going forward. Most importantly, a disciplined capex plan was put into place to more quickly improve the obviously leveraged balance sheet. Operating parameters in ’25 support this narrative, namely improved same store sales, traffic and operating margins, perhaps most notably a fifteen minute quicker table turn at Benihana.
These trends should allow for sufficient operating cash flow in ’26 to continue unit expansion as well as service, if not reduce modestly, the existing long-term debt ($344M at 12/31/25, with $27.2M revolving credit still available) that was incurred as a result of the Benihana acquisition in May ’24. Also put in place while acquiring Benihana, the 13% Preferred stock ($191M at 12/31/25), the interest on which has been Paid in Kind, matures in ’29 but can be paid in ’27, which is an obvious corporate objective. Adjusted EBITDA increased 16.3% in ’25 to $89M (excluding about $4M from two fewer days in ’25). Company guidance for Consolidated Adjusted EBITDA is $100 – $110M in calendar ’26, which should allow for $38-42M of capex (exclusive of landlord allowances), cash interest expense, which was $37M in calendar ’25, as well as modest long term debt reduction.
The common stock of STKS, valued, as shown below, at about 6.1x trailing Adjusted EBITDA, 5.4 that guided to in calendar ’26, is reasonably priced statistically, with substantial upside potential as the Company grows from here. . As the Company produces the projected cash flow, demonstrating to the investment community the ability to reduce the debt over time, as well as restructure the current balance sheet at lower rates, the common stock should be valued more highly.
THE COMPANY
FISCAL YEAR ENDS – DECEMBER
MOST RECENT QUARTER – DECEMBER ’25
ABOVE NUMBERS per Seeking Alpha
BELOW NUMBERS per Lipton Financial Services, Inc.
(2) In March 2024, the Company’s Board of Directors authorized a $5 million share repurchase program. In ’24, about $3.3M was spent to repurchase shares. In calendar ’25, about $400k was spent.
YEAR END ’25 CONFERENCE CALL TRANSCRIPT & March ’26 Website Presentation
The ONE Group Hospitality, Inc. (STKS) Q4 2025 Earnings Call Transcript _ Seeking Alpha
.