Noodles & Co. (NDLS) Working Through Growing Pains, Piper Jaffray Says

Noodles & Co. (NASDAQ: NDLS) is modestly higher Monday (+0.7%) following positive comments from Piper Jaffray analyst Nicole Miller Regan. Regan reiterated an Overweight and price target of $25 saying the company is working through its growing pains.

Regan commented, "This note is written following our recent channel check conversations. In conclusion, we believe the Noodles management team (as well as the stock) is transitioning through fairly typical growing pains as the company enters its next stage of growth. Accountability in this phase should be centered around marketing diagnostics and effective execution; for which human capital is the foundation of both. While this may take time, solid unit-level economics provide the financial capital to do so. We maintain our Overweight rating and $25 price target, based on 15x our current EV/EBITDA estimate; which is partially supported by the favorable nature of the current restaurant cycle. This multiple is a discount to the limited-service median of ~17x and compares to a past premium when the company was performing more effectively."

For an analyst ratings summary and ratings history on Noodles & Co. click here. For more ratings news on Noodles & Co. click here.

Shares of Noodles & Co. closed at $17.49 yesterday.

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