Financial Analysis: Fogo de Chao (FOGO) versus Its Peers

Fogo de Chao (NASDAQ: FOGO) is one of 24 public companies in the “Quick Service Restaurants” industry, but how does it contrast to its rivals? We will compare Fogo de Chao to related companies based on the strength of its profitability, institutional ownership, valuation, earnings, dividends, risk and analyst recommendations.

Insider and Institutional Ownership

85.7% of Fogo de Chao shares are held by institutional investors. Comparatively, 78.3% of shares of all “Quick Service Restaurants” companies are held by institutional investors. 82.8% of Fogo de Chao shares are held by insiders. Comparatively, 16.9% of shares of all “Quick Service Restaurants” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for Fogo de Chao and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fogo de Chao 0 3 3 0 2.50
Fogo de Chao Competitors 255 1401 1698 81 2.47

Fogo de Chao currently has a consensus price target of $14.67, suggesting a potential upside of 36.43%. As a group, “Quick Service Restaurants” companies have a potential upside of 10.66%. Given Fogo de Chao’s stronger consensus rating and higher possible upside, equities analysts clearly believe Fogo de Chao is more favorable than its rivals.

Profitability

This table compares Fogo de Chao and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fogo de Chao 6.76% 7.36% 4.21%
Fogo de Chao Competitors 7.21% 16.69% 10.19%

Earnings & Valuation

This table compares Fogo de Chao and its rivals gross revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Fogo de Chao $288.30 million $24.43 million 14.93
Fogo de Chao Competitors $2.98 billion $437.35 million 136.53

Fogo de Chao’s rivals have higher revenue and earnings than Fogo de Chao. Fogo de Chao is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Volatility and Risk

Fogo de Chao has a beta of 0.32, indicating that its share price is 68% less volatile than the S&P 500. Comparatively, Fogo de Chao’s rivals have a beta of 0.49, indicating that their average share price is 51% less volatile than the S&P 500.

Summary

Fogo de Chao rivals beat Fogo de Chao on 8 of the 13 factors compared.

Fogo de Chao Company Profile

Fogo de Chao, Inc. is a United States-based holding company. The Company, through its subsidiaries, operates upscale Brazilian churrascaria steakhouses under the brand of Fogo de Chao. The Company owns 100% of Brasa (Purchaser) Inc. (Brasa Purchaser), which owns 100% of Brasa (Holdings) Inc. (Brasa Holdings). The Company operates through two segments: United States and Brazil. It specializes in fire-roasting meats utilizing the centuries-old Southern Brazilian cooking technique of churrasco. The Company offers its guests a tasting menu of meats featuring up to 20 cuts, simply seasoned and fire-roasted to expose their natural flavors. The Company operates approximately 26 restaurants in the United States, 10 in Brazil and one in Mexico. The Company operates a range of restaurant formats, including in-line and free-standing locations. Its restaurants range in size from approximately 7,000 to 16,000 square feet, with seating from 200 to 500 guests.

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