MTY Food Group Inc. (OTC:MTYFF) reported earnings per share (EPS) of $2.49 for the second quarter of 2025, surpassing the estimated $0.88. The company’s revenue reached $304.9 million, significantly exceeding expectations of $224 million, driven by its robust franchising model.
MTYFF continues to generate strong free cash flow, with its stock offering a potential total return of 36% and trading at an attractive price-to-cash-flow ratio of approximately 6x.
MTY Food Group Inc., a key player in the food industry, operates a diverse portfolio of quick-service and casual dining brands through an asset-light franchising model. Despite challenges in the U.S. fast-food sector, MTYFF remains competitive among major food service companies.
On July 11, 2025, MTYFF released its second-quarter earnings, reporting a net income of $57.3 million, or $2.49 per diluted share, a substantial increase from $27.3 million, or $1.13 per diluted share, in the prior year. Revenue for the quarter rose to $304.9 million from $303.7 million year-over-year, reflecting stable growth. However, cash flows from operating activities declined slightly to $40.2 million, impacted by lower segment EBITDA.
The franchise segment’s normalized adjusted EBITDA grew by 3% to $54 million. Despite underperformance from certain brands, such as Papa Murphy’s, MTYFF’s system sales increased marginally to $1.5 billion. The company operated 7,046 locations by quarter’s end, slightly down from the previous year.
Trading at a price-to-cash-flow ratio of approximately 6x, MTYFF’s stock remains undervalued compared to peers, offering a potential total return of 36% when factoring in dividends and share buybacks. MTYFF’s financial metrics include a high price-to-earnings (P/E) ratio of 107.83, reflecting a premium valuation relative to earnings. The price-to-sales ratio of 0.78 indicates sales are valued at less than one times revenue. A debt-to-equity ratio of 1.49 suggests significant leverage, while a current ratio of 0.62 points to potential challenges in meeting short-term obligations.
