Sonic Corp. (SONC) Rating Lowered to Hold at Zacks Investment Research
Sonic Corp. (NASDAQ:SONC) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research note issued to investors on Thursday.
According to Zacks, “Sonic Corp. operates and franchises one of the largest chain of drive-in restaurants in the United States. Sonic restaurants offer made-to-order hamburgers and other sandwiches and feature Sonic signature items, such as footlong coney cheese dogs, hand-battered onion rings, tater tots, specialty soft drinks, including cherry limeades and slushes, and frozen desserts. At a typical Sonic restaurant, a customer drives into one of 24 to 36 covered drive-in spaces, orders through an intercom, and has the food delivered by a carhop within an average of four minutes. “
SONC has been the subject of several other reports. Wells Fargo & Company began coverage on shares of Sonic Corp. in a research report on Tuesday, May 23rd. They set a “market perform” rating and a $30.00 target price for the company. Stephens reissued an “overweight” rating and set a $32.00 target price on shares of Sonic Corp. in a research report on Monday, June 26th. Oppenheimer Holdings, Inc. reissued an “outperform” rating and set a $29.00 target price on shares of Sonic Corp. in a research report on Monday, June 26th. Bank of America Corporation reissued an “underperform” rating and set a $28.00 target price (down from $30.00) on shares of Sonic Corp. in a research report on Sunday, June 25th. Finally, BidaskClub downgraded shares of Sonic Corp. from a “strong-buy” rating to a “buy” rating in a research report on Saturday, June 17th. Three investment analysts have rated the stock with a sell rating, ten have assigned a hold rating and four have given a buy rating to the company’s stock. The stock has a consensus rating of “Hold” and a consensus target price of $27.46.
Sonic Corp. (SONC) traded up 2.95% during trading on Thursday, hitting $24.41. 980,045 shares of the stock were exchanged. Sonic Corp. has a 52 week low of $21.12 and a 52 week high of $30.05. The firm’s 50-day moving average is $23.64 and its 200 day moving average is $25.72. The firm has a market cap of $1.02 billion, a PE ratio of 16.27 and a beta of 1.77.
Sonic Corp. (NASDAQ:SONC) last posted its earnings results on Thursday, June 22nd. The restaurant operator reported $0.43 EPS for the quarter, topping the consensus estimate of $0.41 by $0.02. The company had revenue of $124.00 million during the quarter, compared to the consensus estimate of $122.58 million. Sonic Corp. had a net margin of 13.23% and a negative return on equity of 44.21%. The firm’s revenue for the quarter was down 24.9% on a year-over-year basis. During the same period in the previous year, the firm posted $0.43 earnings per share. Analysts expect that Sonic Corp. will post $1.24 earnings per share for the current fiscal year.
Sonic Corp. announced that its board has authorized a share buyback program on Wednesday, August 9th that permits the company to buyback $160.00 million in outstanding shares. This buyback authorization permits the restaurant operator to reacquire up to 16.2% of its shares through open market purchases. Shares buyback programs are often a sign that the company’s management believes its stock is undervalued.
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In other news, Director Steven A. Davis bought 2,000 shares of the firm’s stock in a transaction that occurred on Wednesday, September 6th. The shares were acquired at an average price of $23.00 per share, with a total value of $46,000.00. The acquisition was disclosed in a filing with the SEC, which is available at the SEC website. Insiders have purchased a total of 5,000 shares of company stock worth $117,730 in the last ninety days. 6.24% of the stock is currently owned by insiders.
A number of institutional investors have recently bought and sold shares of SONC. Riverhead Capital Management LLC increased its holdings in Sonic Corp. by 77.7% during the 2nd quarter. Riverhead Capital Management LLC now owns 4,797 shares of the restaurant operator’s stock worth $127,000 after acquiring an additional 2,097 shares during the period. Flinton Capital Management LLC increased its holdings in shares of Sonic Corp. by 74.5% in the 2nd quarter. Flinton Capital Management LLC now owns 6,290 shares of the restaurant operator’s stock worth $167,000 after buying an additional 2,686 shares during the last quarter. Karp Capital Management Corp bought a new position in shares of Sonic Corp. in the 1st quarter worth $209,000. LSV Asset Management bought a new position in shares of Sonic Corp. in the 1st quarter worth $218,000. Finally, State of Alaska Department of Revenue increased its holdings in shares of Sonic Corp. by 72.7% in the 2nd quarter. State of Alaska Department of Revenue now owns 8,378 shares of the restaurant operator’s stock worth $221,000 after buying an additional 3,528 shares during the last quarter.
Sonic Corp. Company Profile
Sonic Corp. operates and franchises the chain of drive-thru restaurants (Sonic Drive-Ins) in the United States. As of August 31, 2016, 3,557 Sonic Drive-Ins were in operation from coast to coast in 45 states, consisting of 345 Company drive-thrus and 3,212 franchise drive-thrus. As of August 31, 2016, its restaurant design and construction consisted of a kitchen housed in a one-story building, which was approximately 1,500 square feet, flanked by canopy-covered rows of 16 to 24 parking spaces, with each space having its own payment terminal, intercom speaker system and menu board.
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