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CERRITOS, Calif. - GEN Restaurant Group, Inc. (NASDAQ:GENK), known for its GEN Korean BBQ chain, has announced the launch of a stock repurchase program. The board of directors has authorized the buyback of up to $5 million in shares of the company’s Class A common stock. According to InvestingPro data, the company’s stock has seen a significant 14.5% return over the last week, though it remains down about 30% over the past six months. With a current market capitalization of $191 million, the buyback represents approximately 2.6% of the company’s market value.
The repurchase program is flexible, allowing the company to pause or stop it at any time without a commitment to purchase a specific number of shares. GEN Restaurant Group can buy back its shares through various methods, including open market transactions and private deals. The timing and volume of repurchases will be at the company’s discretion and will depend on factors like stock market price, economic conditions, legal requirements, and other business considerations. InvestingPro analysis reveals the company operates with a significant debt burden, with a debt-to-equity ratio of 11.6x, which investors should consider when evaluating this buyback program.
Furthermore, the company plans to set up a trading plan in line with Rule 10b5-1 of the Securities Exchange Act of 1934. This plan will enable stock repurchases at times when the company might otherwise be prevented from doing so due to insider trading laws or voluntary trading blackout periods. An independent broker will administer the plan, which will be subject to certain conditions concerning price, market volume, and timing.
GEN Korean BBQ has experienced significant growth since its inception in 2011 by two Korean immigrants in Los Angeles. The restaurant concept, which now boasts over 40 locations, offers a unique dining experience where customers cook their meals on grills at their tables. The menu features a mix of traditional Korean and Korean-American cuisine, catering to a broad customer base. The company has maintained strong revenue growth, with InvestingPro data showing a 15.1% increase in revenue over the last twelve months to $208.4 million. However, the company faces challenges with weak gross profit margins at 17.4%.
The press release also contains forward-looking statements regarding the stock repurchase program, the company’s strategy, and potential growth. However, these statements are not guarantees of future performance and are subject to risks, uncertainties, and changes in circumstances. Investors should note that according to InvestingPro analysis, two analysts have recently revised their earnings downwards for the upcoming period, though the company is still expected to remain profitable this year.
This news is based on a press release statement from GEN Restaurant Group, Inc. Investors are encouraged to review the company’s filings with the Securities and Exchange Commission for a deeper understanding of the risks involved.
In other recent news, GEN Restaurant Group reported its fourth-quarter financial results for 2024, revealing revenues of $54.7 million, surpassing market expectations of $50 million. The company also reported same-store sales (SSS) of negative 4.8%, which was better than the anticipated negative 6.3%. However, GENK’s restaurant-level profitability did not meet expectations, coming in 20 basis points lower than anticipated. The adjusted earnings per share (EPS) aligned with consensus estimates at negative $0.02, but adjusted EBITDA was reported at $2.1 million, falling short of the expected $2.6 million. Following these results, Benchmark analyst Todd Brooks revised the price target for GEN Restaurant Group to $11.00 from the previous $14.00, while maintaining a Buy rating. Brooks cited a more conservative margin outlook for the fiscal year 2025 as the reason for the revised price target. Despite the lowered target, Brooks remains positive about the stock, reflecting confidence in the company’s future potential. These developments provide investors with a snapshot of GEN Restaurant Group’s recent performance and analyst perspectives.
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