Altman Z-Score, Trailing 12 Months: 2.91
Altman Z-Score, Last Fiscal Year: 2.57Red Robin Gourmet Burgers (RRGB - Get Report) Red Robin is the least risky of the group, ranking just below the safety zone with a Z-Score of 2.91, an improvement from 2010 when its core came in at 2.57. This shows that the casual dining burger chain is working to improve its operations. The stock is up around 75% over the past year. And in the first quarter, Red Robin beat quarterly profit expectations by 34 cents. The strong earnings were fueled by the success of a television advertising campaign. TheStreet Ratings Research Manager Chris Stuart recently reported that, according to Bank of America-Merrill Lynch research, Red Robin's stock has the "potential for very substantial near-term EPS growth, from a combination of sales-driving initiatives such as a new loyalty program and better-timed ad spend as well as cost-savings plans."
TheStreet Ratings' model recently upgraded Red Robin to buy from hold with a $42 price target, representing 20% upside from recent trading prices. TheStreet's model upgraded the shares because of the 75% EPS improvement in the most recent quarter. At a P/E of 19 times 2012 earnings, the stock is trading at a slight premium to the rest of the casual-dining group, Stuart noted. It's a premium that's warranted, according to Bank of America, "given that Red Robin's turnaround is just starting and has potential to drive EPS substantially higher."