Oppenheimer has adjusted its outlook on Pinstripes Holdings Inc (NYSE: PNST), reducing the price target to $5.00 from the previous $6.00, while maintaining an Outperform rating on the company's stock.
This revision follows Pinstripes' announcement of a lowered EBITDA guidance for 2025, which has been adjusted to a range of $8 million to $12 million, down from the initial forecast of $19 million to $21 million.
The change in guidance is attributed to increased macroeconomic challenges that have impacted the company's business. Specifically, Pinstripes has seen a decrease in same-store sales (SSS) due to reduced spending on private events, which historically accounted for 40% of revenue in the first quarter of 2025, along with a slowdown in dining and play trends that represent 60% of revenue.
Despite the revised financial projections, Oppenheimer anticipates an improvement in venue-level margins for the remainder of fiscal year 2025.
The expectation is based on the implementation of new cost savings that are projected to benefit mature units, as well as the assumption that newly opened stores will demonstrate stronger profitability metrics going forward.
In response to the updated company guidance, Oppenheimer has also adjusted its EBITDA estimates for Pinstripes for the years 2025 and 2026. The firm now expects EBITDA to be approximately $5.0 million for 2025 and $10.9 million for 2026, which is a decrease from the previous estimates of $17.2 million and $28.6 million, respectively.
InvestingPro Insights
Following Oppenheimer's adjustment of Pinstripes Holdings Inc's (NYSE:PNST) price target, InvestingPro data provides further context to the company's financial health. Pinstripes operates with a significant debt burden, and analysts do not anticipate the company will be profitable this year, as reflected in the negative P/E ratio of -5.41. The company's market capitalization stands at a modest $112.02M, and it is important to note that Pinstripes has been quickly burning through cash.
Despite these challenges, there is a silver lining. Analysts anticipate sales growth in the current year, with a 6.7% revenue growth over the last twelve months as of Q4 2024. Additionally, Pinstripes has recently experienced a strong return over the last month, with a 13.4% price total return, suggesting some investor optimism.
For investors considering Pinstripes Holdings Inc, InvestingPro offers a comprehensive set of tips, including two that are particularly relevant: the company's high price volatility and its tendency to move inversely to the market. For those looking for deeper analysis and additional insights, there are 13 more InvestingPro Tips available at https://www.investing.com/pro/PNST, which can guide investment decisions in light of the company's current dynamics.
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