RAVE Restaurant Group reported a solid Q4 2024 with a revenue of $3.355 million, marking a 10.1% year-over-year increase and 13.3% sequential growth. The quarter delivered a robust gross margin of 75.3%, translating to gross profit of $2.527 million and an EBITDA of $1.265 million. Net income reached $0.88 million, or $0.061 per share (diluted $0.060), yielding a net margin of 26.2% and a strong operating margin of 33.4%. These results reflect a lean cost structure and a franchise-centric business model, contributing to meaningful profitability on a relatively small revenue base.
Cash generation remained positive, with operating cash flow of $1.409 million and free cash flow of $1.401 million. However, the company posted a negative net change in cash of $3.432 million for the period, driven by investing activities of approximately $4.841 million (notably categorized under other investing activities), partially offset by cash on hand and investments. The balance sheet shows a conservative liability profile and ample liquidity: total current assets of $9.536 million against current liabilities of $2.019 million, cash and short-term investments totaling $7.831 million, and net debt of about -$1.929 million. This positions RAVE well to fund franchise expansion opportunities and any selective capex needs while maintaining financial flexibility.
From a valuation standpoint, RAVE trades with a price-to-sales around 8.05 and a price-to-earnings near 7.7, with a price-to-book of 2.13. The enterprise value multiple sits near 19.8x, suggesting the stock commands a premium relative to asset-heavy or slower-growing peers, which may reflect the market’s appreciation for its franchising model and cash-generating potential. Absent a formal earnings-call transcript in the provided data, management commentary could not be quoted directly; the analysis below integrates the disclosed financials with typical franchise-driven growth signals and peer-adjacent benchmarks to form a forward-looking perspective.