Shares in RDE, Inc. (OTCQB: RSTN), the owner of Restaurant.com, is on a roll. Since the start of 2021, its price has appreciated more than 260%, with investors particularly impressed by the pace at which the company is seizing on market and sector opportunities. Goldman Small Cap Research’s bullish analyst report is also contributing to the enthusiasm after they set a six-month price target of $7.50 per share, which would add another 108% to the current $3.60 price tag.
While investors can view the detailed coverage produced by Goldman SCR by clicking here, they have an opportunity to visit the CEO up close and personal later today. Specifically, RDE, Inc. CEO Ketan Thakker will be presenting live at the VirtualInvestorConference.com on Thursday, February 11, 2021, at 1:30 PM to discuss his company, the state of the dining and entertainment industry, and plans he has in place to exploit a massive market opportunity. To join the conference “live,” click HERE a few minutes before the start of the event. It is recommended that participants pre-register for the event online to expedite admission to the event. (LINK: https://bit.ly/2KtV6MY)
Beyond a summary presentation, Mr. Thakker will also open the floor to questions in real-time. If attendees cannot join the event live on the day of the conference, an archived webcast will also be made available after the event.
For those new to RDE. Inc, its Restaurant.com brand is setting up the company to have a breakout year.
Restaurant.Com Sets Up For Breakout Year
While the name Restaurant.com may be worth a few hundred million dollars on its own, the company is working to combine that value with multi-million dollar marketing opportunities. As Goldman SCR suggested, RSTN is a pioneer in the restaurant deal space and could position itself as the nation’s largest and highest-profile restaurant-focused digital deals brand. They specifically noted that RSTN already reaches an estimated 7.8 million customers and offers dining and merchant deal options at over 184,000 restaurants and retailers.
Moreover, RDE said it expects to capitalize on that extraordinary presence and transform the brand into a massive revenue-generating machine. They also feel confident that as the headwinds created by the ongoing pandemic begin to subside, Restaurant.com may be a significant beneficiary to the need for restaurants to attract customers back through their doors. And that could be what’s bringing attention to the stock.
Value Beyond A Name
As noted, the brand name itself holds substantial value. Cars.com, for example, sold for $872 million in 2017. Other high dollar domain sales were Business.com, which sold for $345 million, and Las Vegas.com, a valuable name, sold for $90 million. Thus, putting a value on Restaurant.com would sit it near the top of the list. Although a payday similar to Cars.com could help justify a $75 price tag on a cash basis, RDE, Inc. wants to do much more. Consider the name an ace in the hole.
Instead of flipping a name, the company can create substantially more value through its B2B business plan. There, Goldman SCR estimates that revenue could grow from an estimated $3.6M in 2020 to $14.2M in 2022. And with operating overhead taking its share, at the end of the day, Goldman believes RSTN can deliver EPS of $0.17 in 2022. That, in turn, gets him closer to his $7.50 in 6 months, up from $3.60 today.
Keep in mind, too, from an industry perspective, shares at $3.60 are considerably undervalued. RSTN trades at roughly 4.1x FY21E revenue at these levels, which reflects an approximately 62% discount to the 6.6x multiple given to its peer group. Assuming the markets correct the disconnect, shares could push toward the $7.50 price target quickly. And that’s without doing any heavy leg work.
RSTN To Make Money The Old Fashioned Way- They’ll Earn it
RDE, Inc. has never intended to squat on a name and hope for a buyer. Instead, they created a business plan that attacks revenue-generating opportunities through different channels. The first is transactions based, where RSTN sells discount certificates for restaurants, complementary entertainment and travel offerings, and consumer products on behalf of third-party merchants. Generally, these types of offerings involve a customer’s purchase of a voucher that can be redeemed with a third-party merchant for services or goods (or discounts). If you are familiar with Groupon, you understand the process.
Another way to generate income is through its B2C division. RSTN takes discounting a bit further in this model and sells deeply discounted, no expiration certificates for its core 14,000 restaurants. Typically, these vouchers range in value from $5 to $100. As part of that program, RSTN sells Discount Dining Passes, providing discounts at 170,000 restaurants and other retailers. Other programs built into the B2C model include its “Specials by Restaurant.com”, and bundling of Restaurant.com certificates with various entertainment options, including theater, movies, wine, and travel.
Also, a part of its B2B division is to coordinate sales of gift cards and codes. Targeted clients for this segment include corporations and marketers, which typically use these cards for specialized marketing campaigns. That market is substantial, and especially after coming out of a depressed consumer market, companies will use these RDE programs to attract new customer acquisition, support point-of-sale increases, rewards/loyalty, and motivate specific customer behavior. The best news is that RSTN has set up its programs so that no client is priced out of any of the RSTN services. And, with RDE, Inc. B2B partners ranging in size from small to medium-sized businesses up to Fortune 500 companies, its B2B revenue channel could be a significant value driver in the near term.
Get On The call
Undoubtedly, RSTN is well-positioned for immediate and long-term success. They are in a substantial market and are already positioned to target massive opportunities through its robust and diversified infrastructure. And although it may sound contradictory to its dine-in marketing models, the exponential growth in at-home delivery services creates even greater opportunities.
Thus, to understand why RDE, Inc. is as confident as it has ever been in its history, it’s worth logging in to the live presentation to ask questions. With more than 1 million restaurant locations in the US, a couple hundred million diners to support their cause, and with industry sales expected to top $1.2 trillion by 2030, let RDE’s CEO answer your question as to why they think they will have a breakout year.
The takeaway from the call and presentation may provide a common answer- RDE, Inc., and Restaurant.com are in the right market at the right time.
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