| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 50.06 | 4216 |
| Intrinsic value (DCF) | 1.06 | -9 |
| Graham-Dodd Method | 3.14 | 171 |
| Graham Formula | 1.61 | 38 |
Good Times Restaurants Inc. (NASDAQ: GTIM) is a niche player in the U.S. restaurant industry, operating two distinct brands: Good Times Burgers & Frozen Custard (quick-service drive-through) and Bad Daddy's Burger Bar (full-service upscale casual dining). Headquartered in Golden, Colorado, the company strategically balances franchising with corporate-owned locations, with 42 Bad Daddy's and 32 Good Times outlets as of late 2021. Serving the consumer cyclical sector, GTIM capitalizes on premium burger segment trends while maintaining operational flexibility through its dual-format model. The company's $14.2M market cap reflects its regional focus primarily in the Mountain States and Southeast. With no dividend payout, GTIM reinvests cash flows into unit growth and menu innovation, particularly in its frozen custard differentiation at Good Times and craft burger positioning at Bad Daddy's. The 1.369 beta indicates higher volatility than the broader market, typical for small-cap restaurant operators.
Good Times Restaurants presents a high-risk, high-reward proposition for investors seeking exposure to regional restaurant concepts. The company's $1.6M net income and $5.1M operating cash flow demonstrate recent profitability, though its $44.4M debt load raises leverage concerns at 3x market capitalization. The lack of dividends suggests growth-focused capital allocation, but same-store sales data would better inform unit economics. GTIM's dual-brand strategy provides diversification, with Bad Daddy's benefiting from casual dining recovery trends and Good Times offering drive-through resilience. However, inflationary pressures on beef and labor costs disproportionately impact burger-focused operators. The stock may appeal to investors bullish on regional restaurant consolidation or premium burger demand, but requires close monitoring of debt covenants and franchisee health.
Good Times Restaurants occupies a specialized position between QSR giants and upscale casual chains. Its competitive advantage lies in regional brand recognition (particularly in Colorado for Good Times) and menu differentiation through frozen custard and craft burger offerings. The company's small scale allows for menu agility but creates procurement disadvantages versus larger peers. Bad Daddy's competes in the crowded $20+ burger segment, where it lacks the national advertising power of Shake Shack (SHAK) but offers more localized ambiance. Good Times' drive-through model competes with regional players like Blake's Lotaburger rather than McDonald's, emphasizing quality perception over speed. Key vulnerabilities include limited digital ordering infrastructure compared to larger chains and dependence on franchisees for growth. The company's $3.8M cash position provides modest cushion against downturns, but high debt may limit recession resilience. GTIM's opportunity lies in strategic franchising to capital-light markets while maintaining corporate stores in core regions, though execution risks remain elevated in the current labor market.