Noble Roman's Inc: Who Knew Pizza Could Be So Profitable

Ian Cassel profile picture
Ian Cassel

Noble Roman's Inc (OTCQB:NROM) is an undiscovered, profitable microcap company with 35% operating margins at an inflection point of growth. Historically, Wall Street has given some of the largest PE multiples to restaurant rollout stories and especially to companies with high operating margins. The key is finding them before the growth materializes, and buying the stock before the "smart" money buys them. Noble Roman's is currently on a $0.13 pre-tax EPS run rate, and in this article I will outline how I believe the company will be on a $0.20 EPS run rate by YE 2013 which will warrant a much higher stock price.

In 2010, US Pizza Sales were $35 billion, up 1% over 2009. Independents owned 57% of pizzerias and controlled 48% of sales. After independents, the Top Three pizza chains are Pizza Hut, Domino's Pizza (DPZ), and Papa Johns (PZZA). Pizza Hut, which is owned by Yum! Brands (YUM), holds the top spot with ~7500 units in the US and captures roughly 15% of all US pizza sales, followed by Domino's (9%), Papa John's (6%), Little Caesars (3.5%), and Papa Murphy's Take-N-Bake (1.9%). The top four chains have been mainstays for over a decade, but Papa Murphy's growth from #10 to #5 is the most notable, and illustrates why take-n-bake is the fastest growth arena in the pizza industry.

Noble Roman's, Inc., an Indiana corporation incorporated in 1972, sells and services franchises and licenses for non-traditional foodservice operations under the trade names "Noble Roman's Pizza", "Noble Roman's Take-N-Bake", "Tuscano's Italian Style Subs" and "Tuscano's Grab-N-Go Subs". The concepts' hallmarks include high quality pizza and sub sandwiches, along with other related menu items, simple operating systems, fast service times, labor-minimizing operations, attractive food costs and overall affordability. Since 1997, the Company has focused its efforts and resources primarily on franchising and licensing for non-traditional locations and now has awarded franchise and/or license agreements in 49

This article was written by

Ian Cassel profile picture
Full Time Micro Cap Investor. Founder of Founded in 2011, MicroCapClub is an exclusive forum for experienced microcap investors focused on microcap companies (sub $300m market cap). MicroCapClub was created to be a platform for experienced microcap investors to share and discuss stock ideas. MicroCapClub’s mission is to foster the highest quality microcap investor Community, produce Educational content for investors, and promote better Leadership in the microcap arena.

Recommended For You

Comments (10)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.