BurgerFi International (BFI)

[Televet]

BurgerFi International Inc.: Worth A Bite As A Potential Turnaround Story



https://seekingalpha.com/article/4451589-burgerfi-international-inc-worth-a-bite-as-a-potential-turnaround-story?mail_subject=bfi-burgerfi-international-inc-worth-a-bite-as-a-potential-turnaround-story&utm_campaign=rta-stock-article&utm_content=link-2&utm_medium=email&utm_source=seeking_alpha


Is BFI a Buy?

BurgerFi's Q2 results represented a transitional period setting the stage for the company to move past the pandemic disruptions with a stronger second half of 2021. We believe the turnaround story is compelling enough to take a small position in the stock which we believe offers a compelling valuation with significant upside. We rate shares of BFI as a buy with a price target for the year ahead at $15.50 representing 55% upside from the current level and a 4.5x multiple on our 2022 revenue estimate. The upside here is that the company can exceed expectations on the growth side adding to positive sentiment.

While we are bullish, shares of BurgerFi as a micro-cap stock with currently negative earnings are expected to remain exceptionally volatile and otherwise high risk. The stock is very sensitive to growth estimates and weaker than expected results in the coming quarters could add to further downside for shares. The uncertainty regarding the outlook for COVID and its potential impacts to the restaurant industry remains a risk to watch. Monitoring points for the rest of the year include the gross and restaurant-level operating margin along with progress in opening new restaurant locations.