Sonic Corp. (SONC) Downgraded by Zacks Investment Research to Hold
Zacks Investment Research cut shares of Sonic Corp. (NASDAQ:SONC) from a buy rating to a hold rating in a research report released 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 topic of several other research reports. Wells Fargo & Company began coverage on Sonic Corp. in a report on Tuesday, May 23rd. They issued a market perform rating and a $30.00 price objective on the stock. Stephens reiterated an overweight rating and issued a $32.00 price objective on shares of Sonic Corp. in a report on Monday, June 26th. Oppenheimer Holdings, Inc. reiterated an outperform rating and issued a $29.00 price objective on shares of Sonic Corp. in a report on Monday, June 26th. Bank of America Corporation reiterated an underperform rating and issued a $28.00 price objective (down previously from $30.00) on shares of Sonic Corp. in a report on Sunday, June 25th. Finally, BidaskClub downgraded Sonic Corp. from a strong-buy rating to a buy rating in a report on Saturday, June 17th. Three investment analysts have rated the stock with a sell rating, ten have issued a hold rating and four have given a buy rating to the stock. The company has an average rating of Hold and an average price target of $27.46.
Shares of Sonic Corp. (SONC) traded up 3.016% during trading on Thursday, reaching $24.425. The company’s stock had a trading volume of 465,707 shares. The company has a market capitalization of $1.02 billion, a PE ratio of 16.283 and a beta of 1.77. The stock has a 50 day moving average of $23.63 and a 200-day moving average of $25.73. Sonic Corp. has a 1-year low of $21.12 and a 1-year high of $30.05.
Sonic Corp. (NASDAQ:SONC) last posted its quarterly earnings data on Thursday, June 22nd. The restaurant operator reported $0.43 earnings per share (EPS) for the quarter, beating the Thomson Reuters’ consensus estimate of $0.41 by $0.02. The firm had revenue of $124.00 million for the quarter, compared to the consensus estimate of $122.58 million. Sonic Corp. had a negative return on equity of 44.21% and a net margin of 13.23%. The company’s quarterly revenue was down 24.9% compared to the same quarter last year. During the same quarter in the previous year, the business earned $0.43 EPS. On average, analysts expect that Sonic Corp. will post $1.24 earnings per share for the current year.
Sonic Corp. declared that its board has approved a stock buyback program on Wednesday, August 9th that authorizes the company to buyback $160.00 million in shares. This buyback authorization authorizes the restaurant operator to repurchase up to 16.2% of its shares through open market purchases. Shares buyback programs are generally a sign that the company’s board of directors believes its stock is undervalued.
The business also recently announced a quarterly dividend, which was paid on Friday, August 18th. Investors of record on Wednesday, August 9th were paid a dividend of $0.14 per share. The ex-dividend date was Monday, August 7th. This represents a $0.56 annualized dividend and a yield of 2.36%. Sonic Corp.’s payout ratio is 37.33%.
In related news, Director Steven A. Davis bought 2,000 shares of the stock in a transaction that occurred on Friday, July 21st. The stock was purchased at an average cost of $24.62 per share, with a total value of $49,240.00. The purchase was disclosed in a legal filing with the SEC, which is available through this link. Insiders have purchased a total of 5,000 shares of company stock valued at $117,730 over the last three months. 6.24% of the stock is currently owned by insiders.
Large investors have recently added to or reduced their stakes in the company. Riverhead Capital Management LLC boosted its position in shares of 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 in the last quarter. Flinton Capital Management LLC boosted its position in shares of Sonic Corp. by 74.5% during the 2nd 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 in the last quarter. Karp Capital Management Corp acquired a new position in shares of Sonic Corp. during the 1st quarter worth about $209,000. LSV Asset Management acquired a new position in shares of Sonic Corp. during the 1st quarter worth about $218,000. Finally, State of Alaska Department of Revenue boosted its position in shares of Sonic Corp. by 72.7% during the 2nd quarter. State of Alaska Department of Revenue now owns 8,378 shares of the restaurant operator’s stock worth $221,000 after acquiring an additional 3,528 shares in the last quarter.
About Sonic Corp.
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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