Market Overview

Analysts Question High Price At Zoe's Kitchen


Zoe's Kitchen Inc (NYSE: ZOES) is on track for impressive growth, but its valuation is "a bit tough to stomach," an analyst said Thursday.

Zoe's, which went public last April at $15, closed Thursday at $34.94, up almost 7 percent for the day.

Jefferies Andrew Barish said the company's fourth-quarter earnings beat, posted Wednesday, confirms its strong outlook.

But Barish maintained a Hold rating and $30 target, citing valuation. The analyst continues to expect 2015 earnings of $0.04 a share.

Stephens' Will Slabaugh said Zoe's Mediterranean menu, garnished with Southern comfort food items, is apparently taking restaurant market share from competitors.

"It's one of the most differentiated concepts in the industry," Slabaugh said.

But Slabaugh added that Zoe's stock price "fully incorporates" its growth outlook.

The analyst maintained his 2015 earnings estimate of $0.06 a share.

William Blair's Sharon Zackfia cut her 2015 earnings estimate by 42 percent, to $0.04 a share, but maintained a Buy rating.

Rapid earnings growth will offset "potential downward gravitation in valuation metrics," according to Zackfia.

Higher stock compensation costs in 2015 will be partly offset by wider profit margins, Zackfia said.

Latest Ratings for ZOES

Aug 2018DowngradesBuyHold
Aug 2018MaintainsHoldHold
May 2018DowngradesBuyHold

View More Analyst Ratings for ZOES
View the Latest Analyst Ratings

Posted-In: Andrew Barish Jefferies Sharon Zackfia StephensAnalyst Color Price Target Reiteration Analyst Ratings


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