Noodles & Company's Guidance Reflects Strong Consumer Demand For Its Products, Says Analyst

Stephens analyst Joshua Long reiterated an Overweight rating on the shares of Noodles & Company NDLS with a price target of $7.
The analyst noted that Noodles reported strong 4Q22 results that included top-line beats on same-store sales and revenue, driven by increased frequency, 9% price, and positive sales trends across all markets.
Restaurant-level margins were stronger than expected, supported by sales leverage and some improvement on labor.
Additionally, the analyst believes the company has visibility into its COGS basket for FY23, with chicken contracted for the year, said the analyst.
From a margin perspective, strong top-line trends paired with incremental visibility leave the company well-positioned for achieving FY23 margin guidance.
From a development perspective, the analyst believes the company's new unit pipeline remains strong and well-positioned to achieve 7.5% gross unit growth in FY23 before franchise development starts to perk up in FY24.
The analyst believes the consumer's demand for the Noodles brand remains strong, which is reflected in the company's 1Q23 same-store sales guidance.
Price Action: NDLS shares are trading lower by 4.87% at $5.66 on the last check Thursday.
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Momentum18.83

Growth2.56

QualityNot Available

Value38.28

Short

Medium

Long

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