Josh Arnold
Long/short equity

Jack In The Box: No Growth Catalysts And Unjustifiable Valuation

Thesis

Jack-In-The-Box (NASDAQ:JACK) is a national fast-casual restaurant operator and franchisor that sells hamburgers, milkshakes, French fries and other classic American fast food items through its Jack-In-The-Box branded restaurants and Mexican fast-casual cuisine through its Qdoba branded restaurants in the US. The company purchased Qdoba several years ago on the hope that the chain would fuel future growth for the stagnant Jack-In-The-Box chain that reached its peak and virtually ceased growing in the early 2000's. Indeed, the Qdoba chain has grown significantly since JACK purchased it but the easy growth has been realized and the market is pricing in unrealistic expectations for the parent company given the hamburger chain's declining revenue, Qdoba's lack of adoption in some areas...

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