Wedbush Sees Comps Inflection At Noodles & Co.

Noodles & Co.'s

investors may be once bitten and twice shy, but an analyst on Wednesday said its possible the company might finally meet its own predictions for 2015 results. The Broomfield, Colorado-based restaurant chain, which went public in 2013, has missed quarterly expectations by double-digit percentages in three of the past four quarters. Noodles' shares are off 48 percent since going public and changed hands recently at $18.77, up $0.07 cents. Wedbush's Nick Setyan maintained a Neutral rating and $22 target on the company, but said its same-store sales may be at a favorable inflection point. "It's the first positive data we've seen at Noodles in many quarters," Setyan said. Sales in stores open more than a year are "tracking" at a growth rate of 2.5 percent or more for the first quarter, according to Setyan. Analysts are expecting growth of just 1.5 percent. The company, with with 439 locations, offers an Asian-Italian menu and on April 1 launched its "Buff" line of food items. The line-up omits noodles and is heavy on meat and vegetables. Current company guidance calls for 2015 same-store sales growth of between 2.5 percent and 4 percent, versus the Wall Street consensus of 2.3 percent, according to Setyan. Setyan believes the company's guidance "may be achievable," and continues to forecast same-store sales growth of 3 percent. Noodles' forecast for 20 percent earnings growth this year "may be a tough hurdle," according to Setyan, who noted that the Street expects growth of 17 percent, with buy-side sentiment even lower. But if full-year same-store sales growth proves to be 3.25 percent or higher, Setyan said Noodles' EPS growth forecast could materialize.