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1. Company Snapshot

1.a. Company Description

Noodles & Company, a restaurant concept company, develops and operates fast-casual restaurants.It offers cooked-to-order dishes, including noodles and pasta, soups, salads, and appetizers.As of December 28, 2021, the company operated 448 restaurants in 29 states, which included 372 company locations and 76 franchise locations.


Noodles & Company was founded in 1995 and is based in Broomfield, Colorado.

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1.b. Last Insights on NDLS

The recent 3-month performance of Noodles & Company was negatively impacted by a weak consumer environment and heightened competition. The company's Q4 earnings and revenue missed estimates, with a quarterly loss of $0.15 per share versus the Zacks Consensus Estimate of a loss of $0.13. Additionally, the company's fiscal fourth-quarter comps benefited from new menu items, promotional initiatives, and strengthened third-party delivery momentum, but this was not enough to offset the decline in sales.

1.c. Company Highlights

2. Noodles & Company's Q3 2025 Earnings: A Strong Recovery

Noodles & Company's financial performance in Q3 2025 showed a mixed bag, with total revenue decreasing 0.5% to $122.1 million, while adjusted EBITDA increased by nearly 33% to $6.5 million compared to the same period last year. The company's EPS came in at -$0.1, beating estimates of -$0.13. The revenue decline was largely due to the closure of 15 company-owned restaurants and 3 franchise restaurants during the quarter. However, system-wide comp restaurant sales increased 4.0%, driven by a 4.6% increase in average check, which included 2% effective pricing.

Publication Date: Nov -18

📋 Highlights
  • Comparable Sales Growth:: Q3 comparable sales rose 4%, accelerating to 8% in October, with traffic up 1.5% despite a challenging consumer environment.
  • Revenue Decline:: Total revenue fell 0.5% to $122.1 million, driven by restaurant closures and underperforming locations.
  • EBITDA Improvement:: Adjusted EBITDA surged 33% to $6.5 million, up from $4.9 million in Q3 2024.
  • Delicious Duos Impact:: The value platform boosted third-party delivery sales by 12%, with a 4–5% menu mix and strong repeat customer rates.
  • Store Closures & Savings:: 18 restaurants (15 company, 3 franchise) closed in Q3, generating a $300K EBITDA benefit and a 100-basis-point sales lift year-to-date.

Operational Highlights

The company's operational performance was a highlight, with comparable sales growing 4% in Q3, improving sequentially each month, and accelerating to 8% in October. Traffic was up over 1.5%, a positive sign, especially considering the challenging consumer environment. The introduction of the Delicious Duos platform in late July has been a significant contributor to this growth, with the value offering resonating with customers and driving repeat business. As Joseph Christina noted, "the early results show that guests view Duos as an everyday option rather than a limited-time promotion, allowing them to make noodles a regular part of their dining routine."

Growth Drivers

The Delicious Duos platform has been a key growth driver, with a mix of around 4-5% across restaurants, and a strong repeat rate among customers. The company's digital sales channel has also shown significant improvement, driven largely by third-party delivery, which increased 12%. The ramen LTO, launched in October, has been well-received, with a positive impact on trial and repeat business.

Valuation and Outlook

With a P/S Ratio of 0.06, the market appears to have low expectations for Noodles & Company's revenue growth. Analysts estimate next year's revenue growth at -5.3%, indicating a potentially challenging environment. However, the company's efforts to revamp its brand and menu offerings, as well as its focus on digital sales, may help drive growth. The EV/EBITDA ratio of -26.92 suggests that the market is pricing in significant challenges, but the company's improving EBITDA margin and efforts to optimize its restaurant portfolio may help alleviate some of these concerns.

3. NewsRoom

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Galloway Capital Partners Announces 6.01% Stake in Noodles & Company

Dec -03

Source: businesswire.com

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Treat Yourself to Extra Joy with Noodles & Company's Limited-Edition Holiday Crispy Made with SNICKERS®

Dec -01

Source: prnewswire.com

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Noodles & Company (NASDAQ:NDLS) Stock Price Crosses Below 200-Day Moving Average – Should You Sell?

Nov -22

Source: defenseworld.net

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Noodles & Company (NDLS) Q3 2025 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

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Noodles & Company Announces Third Quarter 2025 Financial Results

Nov -05

Source: globenewswire.com

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Noodles & Company Serves Up a Delicious Alternative as Pizza Fatigue Hits This Holiday Season

Nov -03

Source: prnewswire.com

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Noodles & Company Turns Up the Heat with New Chili Garlic Ramen

Oct -09

Source: prnewswire.com

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You're invited: party like it's 1995 with nostalgic prices inspired by Noodles & Company's beginnings

Sep -30

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.19%)

6. Segments

Restaurant

Expected Growth: 1.2%

Noodles & Company's 1.2% growth is driven by increasing same-store sales, successful menu innovation, and strategic marketing efforts. Additionally, the company's focus on digital transformation, including online ordering and delivery, has contributed to the growth. Furthermore, Noodles & Company's expansion into new markets and remodeling of existing locations have also supported the growth momentum.

Franchising Royalties and Fees and Other

Expected Growth: 0.8%

Noodles & Company's 0.8% growth in Franchising Royalties and Fees and Other is driven by increasing same-store sales, expansion of existing franchisee base, and higher royalties from new franchise agreements. Additionally, the company's focus on digital transformation, menu innovation, and marketing efforts contribute to the growth.

7. Detailed Products

Noodles

A variety of noodle dishes inspired by flavors from around the world, made with fresh vegetables, lean proteins, and savory sauces.

Salads

Fresh mixed greens, vegetables, and lean proteins, topped with crispy croutons and a variety of dressings.

Soups

Creamy and savory soups made with fresh vegetables and lean proteins, served hot and steaming.

Sandwiches

Freshly baked bread filled with lean meats, cheeses, and vegetables, served hot and toasted.

Piadinas

Thin, crispy flatbreads topped with fresh vegetables, lean meats, and savory sauces.

Catering

Customizable catering options for events and gatherings, featuring a variety of Noodles & Company dishes.

8. Noodles & Company's Porter Forces

Forces Ranking

Threat Of Substitutes

Noodles & Company faces moderate threat from substitutes, as customers can opt for other fast-casual dining options or cook at home.

Bargaining Power Of Customers

Customers have significant bargaining power due to the high level of competition in the fast-casual dining industry, allowing them to easily switch to alternative options.

Bargaining Power Of Suppliers

Noodles & Company has a diverse supplier base, reducing the bargaining power of individual suppliers, and the company's scale of operations gives it negotiating power.

Threat Of New Entrants

While there are barriers to entry in the fast-casual dining industry, new entrants can still pose a threat to Noodles & Company, particularly if they offer innovative menu options or unique dining experiences.

Intensity Of Rivalry

The fast-casual dining industry is highly competitive, with many established players and new entrants vying for market share, leading to intense rivalry among competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 80.57%
Debt Cost 3.95%
Equity Weight 19.43%
Equity Cost 12.37%
WACC 5.58%
Leverage 414.80%

11. Quality Control: Noodles & Company passed 0 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Potbelly

A-Score: 4.1/10

Value: 2.4

Growth: 6.0

Quality: 3.5

Yield: 0.0

Momentum: 9.5

Volatility: 3.0

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Value: 8.6

Growth: 2.0

Quality: 4.4

Yield: 0.0

Momentum: 8.0

Volatility: 0.0

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Red Robin

A-Score: 3.6/10

Value: 8.2

Growth: 1.4

Quality: 3.6

Yield: 0.0

Momentum: 7.5

Volatility: 1.0

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Portillo's

A-Score: 3.6/10

Value: 8.1

Growth: 5.0

Quality: 4.1

Yield: 0.0

Momentum: 1.0

Volatility: 3.3

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Noodles

A-Score: 3.2/10

Value: 10.0

Growth: 1.1

Quality: 5.9

Yield: 0.0

Momentum: 1.5

Volatility: 1.0

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Kura Sushi USA

A-Score: 2.7/10

Value: 3.4

Growth: 6.0

Quality: 2.7

Yield: 0.0

Momentum: 1.5

Volatility: 2.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

0.98$

Current Price

0.98$

Potential

-0.00%

Expected Cash-Flows