BurgerFi International, Inc.

BurgerFi International, Inc. (NASDAQ: BFI) is a fast-food restaurant business with locations both in the United States and abroad. There are around 125 BurgerFi outlets in the firm. It serves excellent burgers, hot dogs, crispy chicken, frozen custard, hand-cut fries, shakes, beer, wine, and more on a typical American menu.

Key Highlights:

• Negative margins: The company has reported negative EBITDA margin, Operating margin, and negative Net margin, implies poor financial health of the company.
• Trading at a stretched valuation: From the LTM Price to Earnings multiple standpoints, BFI shares are trading at a stretched valuation compared to its peers. With BFI’s P/E multiple stood at 40.27x whereas peers media LTM P/E multiple stood at 18.35x. This indicates a significantly higher valuation BFI shares are commanding against its peers despite a poor financial health.

Stock Recommendation

From the fundamental standpoint BFI reported weak financial performance, despite that the stock is trading at a stretched valuation compared to its peers which is not sustainable from investment standpoint. Hence, we recommend an "Avoid" rating on the stock at the closing price of USD 3.90, up 0.5.12% on April 13, 2022.

BFI’s Technical Price Chart (as of April 13, 2022). Source: REFINITIV, Analysis by Kalkine Group

Note 1: The reference data in this report has been partly sourced from REFINITIV. 

Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above.

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