Sonic (SONC) Cut to Strong Sell at BidaskClub

Sonic (NASDAQ:SONC) was downgraded by BidaskClub from a “sell” rating to a “strong sell” rating in a note issued to investors on Wednesday.

Several other brokerages also recently issued reports on SONC. UBS Group reissued a “neutral” rating and set a $28.00 price objective (up from $26.00) on shares of Sonic in a research report on Friday, January 5th. Canaccord Genuity reissued a “hold” rating and set a $30.00 price objective on shares of Sonic in a research report on Friday, January 5th. Oppenheimer downgraded shares of Sonic from an “outperform” rating to a “market perform” rating and set a $29.00 price objective on the stock. in a research report on Thursday, January 4th. Zacks Investment Research raised shares of Sonic from a “sell” rating to a “hold” rating in a research report on Thursday, October 26th. Finally, Guggenheim reissued a “buy” rating and set a $31.00 price objective (up from $29.00) on shares of Sonic in a research report on Thursday, December 28th. Two investment analysts have rated the stock with a sell rating, seven have assigned a hold rating and six have assigned a buy rating to the stock. The company currently has an average rating of “Hold” and an average target price of $29.64.

Sonic (SONC) opened at $25.70 on Wednesday. The company has a debt-to-equity ratio of -2.87, a current ratio of 1.81 and a quick ratio of 1.81. The company has a market cap of $1,002.22, a price-to-earnings ratio of 17.30, a P/E/G ratio of 1.17 and a beta of 1.74. Sonic has a 52-week low of $22.11 and a 52-week high of $30.05.

Sonic (NASDAQ:SONC) last issued its quarterly earnings data on Thursday, January 4th. The restaurant operator reported $0.30 earnings per share (EPS) for the quarter, topping the Thomson Reuters’ consensus estimate of $0.25 by $0.05. Sonic had a net margin of 13.68% and a negative return on equity of 28.95%. The company had revenue of $105.40 million for the quarter, compared to the consensus estimate of $106.86 million. During the same period last year, the firm posted $0.24 EPS. Sonic’s revenue for the quarter was down 18.7% on a year-over-year basis. research analysts predict that Sonic will post 1.52 earnings per share for the current fiscal year.

Sonic declared that its Board of Directors has initiated a share repurchase program on Thursday, October 26th that allows the company to buyback $160.00 million in shares. This buyback authorization allows the restaurant operator to buy up to 14.9% of its stock through open market purchases. Stock buyback programs are usually an indication that the company’s management believes its stock is undervalued.

In other Sonic news, Director Federico F. Pena sold 9,209 shares of Sonic stock in a transaction dated Thursday, November 30th. The shares were sold at an average price of $25.22, for a total transaction of $232,250.98. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, Director Federico F. Pena sold 4,575 shares of Sonic stock in a transaction dated Wednesday, January 17th. The stock was sold at an average price of $25.99, for a total transaction of $118,904.25. The disclosure for this sale can be found here. In the last 90 days, insiders have sold 121,001 shares of company stock valued at $3,347,794. 8.28% of the stock is currently owned by company insiders.

Institutional investors and hedge funds have recently made changes to their positions in the business. Riverhead Capital Management LLC raised its position in Sonic by 77.7% during the second 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 last quarter. Flinton Capital Management LLC raised its position in Sonic by 74.5% during the second quarter. Flinton Capital Management LLC now owns 6,290 shares of the restaurant operator’s stock worth $167,000 after acquiring an additional 2,686 shares during the last quarter. Bayesian Capital Management LP acquired a new position in Sonic during the second quarter worth about $228,000. Wolverine Trading LLC raised its position in Sonic by 382.4% during the third quarter. Wolverine Trading LLC now owns 9,110 shares of the restaurant operator’s stock worth $232,000 after acquiring an additional 12,336 shares during the last quarter. Finally, Crossmark Global Holdings Inc. acquired a new position in Sonic during the third quarter worth about $239,000.

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Sonic 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.

Analyst Recommendations for Sonic (NASDAQ:SONC)

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