Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Citi has raised its price target on Kura Sushi USA Inc . (NASDAQ:KRUS) to $96.00 from $85.00 while maintaining a Neutral rating on the stock. Currently trading at $86.78, the stock appears overvalued according to InvestingPro Fair Value metrics. Notably, three analysts have recently revised their earnings estimates upward for the upcoming period.
The price target increase reflects Citi’s observation that topline drivers, including reservations and IP collaborations, are resonating with guests at the restaurant chain.
Citi noted that a compelling pitch for improving and more consistent same-store sales into fiscal year 2026 may be enough to reengage some longer-term investors in Kura Sushi stock.
Despite the positive outlook on sales, Citi pointed out that flow-through remains choppy, with Kura Sushi-defined store margins down almost 200 basis points year-over-year, even as cost-savings tools are being implemented throughout the system.
Citi acknowledged the challenge of Kura Sushi’s small store base but indicated that more sustained share outperformance would require growing consistency in both top and bottom-line results to anchor views on valuation.
In other recent news, Kura Sushi USA Inc. reported a surprising profit for its fiscal third quarter, surpassing analyst expectations and boosting its full-year revenue guidance. The company posted a net income of $0.6 million, or $0.05 per diluted share, a significant improvement from the net loss of $0.6 million, or $0.05 per diluted share, in the same period last year. Analysts had anticipated a loss of $0.01 per share. Revenue increased by 17.3% to $74 million, exceeding the consensus estimate of $72.13 million. Despite this, comparable restaurant sales saw a decrease of 2.1% year-over-year. Kura Sushi also raised its fiscal 2025 revenue outlook to approximately $281 million, above the analyst consensus of $278 million. Additionally, the company opened three new restaurants during the quarter and plans to open a total of 15 new locations this fiscal year. These developments reflect the company’s ongoing expansion efforts and strategic initiatives.
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