Markets

Noodles & Co. (NDLS) Stock Sinks As Market Gains: What You Should Know

Noodles & Co. (NDLS) closed at $7.03 in the latest trading session, marking a -1.13% move from the prior day. This move lagged the S&P 500's daily gain of 0.09%. Elsewhere, the Dow gained 0.09%, while the tech-heavy Nasdaq added 0.62%.

Prior to today's trading, shares of the restaurant chain had lost 12.22% over the past month. This has lagged the Retail-Wholesale sector's gain of 1.44% and the S&P 500's gain of 2.08% in that time.

Investors will be hoping for strength from NDLS as it approaches its next earnings release. The company is expected to report EPS of $0.05, up 400% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $117.25 million, down 0.13% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.16 per share and revenue of $468.17 million. These totals would mark changes of +700% and +2.26%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for NDLS. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. NDLS currently has a Zacks Rank of #1 (Strong Buy).

In terms of valuation, NDLS is currently trading at a Forward P/E ratio of 43.53. For comparison, its industry has an average Forward P/E of 22.86, which means NDLS is trading at a premium to the group.

Investors should also note that NDLS has a PEG ratio of 4.97 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Restaurants industry currently had an average PEG ratio of 2.12 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 146, which puts it in the bottom 43% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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