NEW YORK (TheStreet) -- Noodles & Co. (NDLS) shares are down 20.81% to $16.40 in pre-market trading on Wednesday after analysts at Jefferies lowered the company's price target to $22 from $27 while maintaining its "buy" rating today following the casual restaurant company's first quarter earnings miss.
After the closing bell yesterday, the company reported a first quarter net loss of $2.8 million which yielded an EPS of 3 cents per share on revenue of $105.8 million. Analysts on average were expecting the company to report earnings of 5 cents per share on revenue of $110 million.
The firm also noted that the company lowered its EPS growth expectations to flat from its previous 20% growth guidance as part of the reason for its lowered price target expectations.
"NDLS stock will likely break below its $18 IPO price from 6/13 IPO and would be trading at about 9x EV/EBITDA. Although this turnaround is clearly taking longer and presenting complications, this valuation appears attractive for core/value investors looking for exposure in a restaurant group that is clearly under distribution currently. We believe 2H progress around marketing can still be a catalyst for stock, but lower our PT to $22 from $27," analysts said.
TheStreet Ratings team rates NOODLES & CO as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate NOODLES & CO (NDLS) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and poor profit margins."