Executive Summary
RAVE Restaurant Group reported QQ3 2024 revenue of $2.962 million, flat on a year-over-year basis (-0.27%) and up 6.09% quarter-over-quarter. The quarter delivered a robust gross margin of 70.6%, contributing to an EBITDA of $0.962 million and an operating income of $0.809 million, yielding an operating margin of 27.3%. Net income came in at $0.654 million, with basic and diluted EPS of $0.0448 and $0.0444 respectively, representing substantial YoY improvements of approximately 96% in EPS and 102% in net income, and QoQ gains of about 17% in EPS. The company generated meaningful operating cash flow of $1.026 million and free cash flow of $0.996 million, supporting a strong liquidity position evidenced by cash and equivalents of $6.318 million and a net cash position of approximately -$5.253 million in net debt (i.e., cash exceeds debt).
Balance sheet and liquidity indicators remain favorable: total assets are ~$14.956 million with total liabilities of ~$3.156 million and stockholders’ equity of ~$11.800 million. The current ratio stands at 4.24, underscoring ample short-term liquidity. Cash flow from operations coupled with modest capital expenditures ($0.03 million) enabled positive free cash flow, enabling potential support for strategic initiatives within the brand portfolio (Pizza Inn Franchiseing, Pie Five Franchising, and Company-Owned Restaurants) without pressuring the balance sheet.
Market positioning remains a key consideration. RAVE operates across multiple formats (Pizza Inn franchising, Pie Five franchising, and Company-Owned operations) and benefits from a diversified revenue mix, contributing to margins that appear resilient in the QQ3 2024 quarter. The stock is trading with elevated valuation metrics (e.g., price-to-sales ~9.95x and price-to-earnings ~11.26x), reflecting a premium relative to many small-cap peers, which places a premium on sustained margin stability and visible Franchise growth catalysts to support re-rating. Absent explicit quarterly guidance in the filing, investors should weigh the company’s strong cash generation and low leverage against the relatively modest revenue scale and the absence of forward-looking guidance.
Key Performance Indicators
QoQ: 18.26% | YoY:102.48%
Key Insights
Revenue: $2.962 million; YoY change: -0.27%; QoQ change: +6.09%
Gross Profit: $2.092 million; Gross Margin: 70.63%; YoY change: +4.29%; QoQ change: +10.63%
EBITDA: $0.962 million; EBITDA Margin: 32.48%
Operating Income: $0.809 million; Operating Margin: 27.31%
Net Income: $0.654 million; Net Margin: 22.08%
EPS (basic): $0.0448; EPS (diluted): $0.0444; YoY EPS Change: +96.49%; QoQ EPS Change: +16.97%
Operating Cash Flow: $1.026 million; Free Cash Flow: $0.996 million
Cash and Cash Equivalents: $6...
Financial Highlights
Revenue: $2.962 million; YoY change: -0.27%; QoQ change: +6.09%
Gross Profit: $2.092 million; Gross Margin: 70.63%; YoY change: +4.29%; QoQ change: +10.63%
EBITDA: $0.962 million; EBITDA Margin: 32.48%
Operating Income: $0.809 million; Operating Margin: 27.31%
Net Income: $0.654 million; Net Margin: 22.08%
EPS (basic): $0.0448; EPS (diluted): $0.0444; YoY EPS Change: +96.49%; QoQ EPS Change: +16.97%
Operating Cash Flow: $1.026 million; Free Cash Flow: $0.996 million
Cash and Cash Equivalents: $6.318 million
Total Assets: ~$14.956 million; Total Liabilities: ~$3.156 million; Total Equity: ~$11.800 million
Current Ratio: 4.24; Net Debt: -$5.253 million (net cash position)
Capital Expenditures (CapEx): $0.03 million; Cash Flow to CapEx: 34.2x (based on ratios)
Return Metrics (selected): ROE 5.54%, ROA 4.37%; Asset Turnover 0.198; Gross Margin 70.6%; Operating Margin 27.3%
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
2.96M |
-0.27% |
6.09% |
| Gross Profit |
2.09M |
4.29% |
10.63% |
| Operating Income |
809.00K |
84.70% |
63.77% |
| Net Income |
654.00K |
102.48% |
18.26% |
| EPS |
0.04 |
96.49% |
16.97% |
Key Financial Ratios
operatingProfitMargin
27.3%
operatingCashFlowPerShare
$0.07
freeCashFlowPerShare
$0.07
Management Commentary
Note: Earnings call transcript data not provided in the supplied materials. As such, key management quotes or thematic insights from Q3 2024 discussions cannot be cited directly. If the transcript becomes available, the highlights can be added with thematic groupings (strategy, operations, market conditions) and context.
Forward Guidance
There is no explicit forward-looking guidance disclosed in the QQ3 2024 filing. Given the operating margin resilience and strong liquidity, the company could leverage its cash position to support franchise program investments, accelerate the Pizza Inn and Pie Five franchise portfolios, or fund selective store-level capex if demand trends improve. Industry tailwinds toward delivery and off-premise channels may bolster revenue modestly, but the small revenue base and limited visibility warrant a cautious stance. Investors should monitor: (1) franchise expansion activity and same-store sales trends, (2) competitive dynamics in mid-market pizza concepts, (3) input cost inflation and its pass-through to royalty streams, and (4) any management commentary on unit economics and capital allocation priorities.