Bear of the Day: Kura Sushi (KRUS)

David Bartosiak
·2-min read

The tech stocks are really rocking and rolling right now, as the US economy is showing some signs of weakening. That’s a good thing for the inflation hawks out there though. Essentially, the only way to cool inflation off is to cool off the economy. We are starting to see some signs of that in various industries. One area that has been hit is the restaurant business. You see closures from Red Lobster to TGI Friday’s and everything in between.

Today’s Bear of the Day is a stock in the restaurant industry. It’s Zacks Rank #5 (Strong Sell) Kura Sushi USA (KRUS). Kura Sushi USA is a fast-growing, technology-enabled restaurant concept serving authentic Japanese cuisine through an engaging revolving sushi service model. The Kura experience creates an exciting atmosphere that promotes a sense of discovery and enables guests to control the variety, portioning, check size and pace of their dining experience. 

The stock has been cut to a Zacks Rank #5 (Strong Sell) because of negative earnings estimate revisions coming from analysts. Over the last thirty days, negative revisions have cut our Zacks Consensus Estimate for the current year from a 26-cent profit to a 35-cent loss. Next year’s number is off from 58 cents to 15 cents. That means here the stock is trading at 413x next year’s earnings.

It’s not all gloom and doom for this name. Revenue growth is staggering, at 28% this year and 24% next year. Both are monster numbers that long-term investors can hang their hats on. It’s just the profitability that is an issue in the intermediate term.

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Zacks Investment Research


Image Source: Zacks Investment Research

The Retail – Restaurants industry is in the Bottom 29% of our Zacks Industry Rank. There are a few names in this industry which are in the good graces of our Zacks Rank. These include Zacks Rank #1 (Strong Buy) CAVA Group (CAVA) and Brinker International (EAT).


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