Investing.com - Piper Sandler initiated coverage on The ONE Group Hospitality Inc. (NASDAQ:STKS), currently valued at $145 million, with a Neutral rating and a $6.00 price target on Monday. According to InvestingPro, the stock has shown strong momentum with a 47% gain over the past six months.
The research firm cited the strategic merit of the company's acquisition of Benihana last year, noting the brand offers new growth opportunities for The ONE Group to capitalize on over time.
Piper Sandler also highlighted that the company's STK Steakhouse brand has established a growing share of the Full Service Steak category, with management planning continued expansion through its unit development pipeline.
The firm expressed concerns about post-acquisition balance sheet leverage, including net debt plus preferred equity, as factors influencing its neutral stance on the stock.
Recent top-line trends at the company's Grill Concept Brands, which include Kona Grill and RA Sushi, were also identified as areas Piper Sandler will continue monitoring, contributing to its assessment that the risk-reward balance for the stock is relatively balanced at present.
In other recent news, The ONE Group Hospitality reported a significant increase in revenue for 2024, achieving a 102% growth to $673.3 million, primarily due to the integration of newly acquired restaurant brands Benihana and RA Sushi. In the first quarter of 2025, the company surpassed earnings expectations, posting an adjusted earnings per share of $0.14, against a forecasted loss of $0.10, and generating $211.2 million in revenue, slightly above the anticipated $207.44 million. Freedom Broker initiated coverage on The ONE Group with a Buy rating, setting a price target of $5.50, citing the company's expanding brand portfolio and improving cash flows as key factors for its positive outlook.
Additionally, The ONE Group's Annual Meeting of Stockholders led to the election of new directors and the ratification of Deloitte & Touche, LLP as the independent auditor for the fiscal year ending December 28, 2025. The company is also focusing on expanding its restaurant portfolio and enhancing its loyalty program, which includes the launch of the "Friends with Benefits" rewards program. Moreover, the company plans to open 5 to 7 new venues in 2025 and is targeting significant growth in its Benihana and STK restaurant chains. The ONE Group is actively exploring franchising opportunities to expand its market presence, with efforts to increase awareness in the franchising business. These developments reflect the company's strategic direction and efforts to drive sustainable long-term growth.

The ONE Group Hospitality stock initiated at Neutral by Piper Sandler

Piper Sandler initiated coverage on The ONE Group Hospitality Inc. with a Neutral rating and $6.00 price target, citing the company's strategic acquisition of Benihana and growth in its STK Steakhouse brand. The company reported 102% revenue growth in 2024 and surpassed earnings expectations in Q1 2025. Freedom Broker also initiated coverage with a Buy rating. The company is expanding its restaurant portfolio, launching a loyalty program, and exploring franchising opportunities.