Meritage Hospitality Group Inc (MHGU) Fair Value & Analysis
Consumer Cyclical · US · Market cap $16.4M · ISIN US59000K3095
What is Meritage Hospitality Group Inc really worth?
Meritage Hospitality Group Inc
MHGU · US
Below-average quality, trading 57% below our fair value of $4.78.
Risks
Fair value as of: Aug 27, 2026
From 4 valuation models · updated 8 days ago
Share price −8.9% over the past month.
What runs behind every stock
69 individual criteria per stock, every one traceable See the method →
What matters now
- The large discount to fair value meets weak quality (33/100). That raises the risk this is a value trap rather than a bargain.
- The price is below even our cautious bear case ($2.44). The market is more pessimistic than our downside scenario.
- The model range is unusually wide ($2.44 to $7.11). The outcome hinges heavily on assumptions, so read the point estimate with caution.
- The large gap to fair value rests on thin data (low evidence): fewer applicable models and a shorter history. Read it with extra caution.
Price vs Fair Value (5 years)
White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Aug 27, 2026.
How to read this chart
60‑month range $1.60 – $22.16 · fair‑value band $2.44 – $7.11 · the $2.05 price screens below the $4.78 fair value. Dashed = 300-day average. As of Aug 27, 2026.
Analysis
Meritage Hospitality Group Inc (MHGU) currently trades at $2.05, while our model-based Fair Value estimate is $4.78, implying the stock looks roughly 57.1% undervalued today. The Quality Score stands at 33/100 (below-average quality), in the Consumer Cyclical sector. Bull case: the Multiples group reads highest at a median of $19.39 per share, and 4 of the 4 models we run sit above the $2.05 price. Bear case: the Dividend Discount group reads lowest at $3.14, and 0 of the 4 models stay below the price. Evidence for this calculation is low.
Over the trailing twelve months, Meritage Hospitality Group Inc generated revenue of $618M at a net margin of −5.1%. Revenue grew 5.2% year over year. It earns a return on equity of −27.7%. Net debt stands at $159M. Fundamentals as of Aug 27, 2026
Our scenario range runs from $2.44 (bear case) to $7.11 (bull case); at $2.05, the current price sits below that range. Bear and bull are the same models run on conservative and optimistic assumptions (margins, growth, valuation multiples), so a plausible valuation range, not a price target. For context, the median of 10 Consumer Cyclical peers we cover trades at −47% fair-value upside, at 133%, MHGU screens cheaper than that median.
Fair Value models
Each model estimates fair value its own way; the Fair Value above is the evidence-weighted, family-balanced blend. Evidence (0–100) measures how completely this model’s inputs are available: well-fed models carry more weight in the blend. The spread across models is intentional, each one stresses a different value driver; dividend models, for instance, come out structurally low when payout is small. Every input is real reported data, nothing guessed.
All 4 models by family
Widest divergence: Multiples ($19.39) versus Dividend Discount ($3.14). Highest evidence: Gordon GGM (68).
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Key figures & financial health
More key figures
Figures from reported company fundamentals · as of Aug 27, 2026. TTM = trailing twelve months.
Quality Score breakdown
Of which business quality 31 · Market factors (momentum, volatility) 23
Non-valuation factor families (profitability, growth, cashflow, financial strength, momentum …), each academically grounded. Valuation itself sits in the Fair Value and is deliberately excluded here to avoid double-counting.
All values are scores from 0 to 100 (100 = best against fixed, research-based bands), not percentages. The three market factors (momentum, 52-week proximity, low volatility) are displayed but carry zero weight in the headline number: market sentiment is not a business property.
About the company
Meritage Hospitality Group Inc., together with its subsidiaries, operates quick-service and casual dining restaurants. The company operates restaurants under the Wendy's, Morning Belle, and Blue Porch Bar & Grill brand names in Arkansas, Connecticut, Florida, Georgia, Indiana, Massachusetts, Michigan, Mississippi, Missouri, North Carolina, Ohio, Oklahoma, …
Full company description
Meritage Hospitality Group Inc., together with its subsidiaries, operates quick-service and casual dining restaurants. The company operates restaurants under the Wendy's, Morning Belle, and Blue Porch Bar & Grill brand names in Arkansas, Connecticut, Florida, Georgia, Indiana, Massachusetts, Michigan, Mississippi, Missouri, North Carolina, Ohio, Oklahoma, Tennessee, Texas, and Virginia. It is also involved in franchising activities. The company was formerly known as Thomas Edison Inns, Inc. and changed its name to Meritage Hospitality Group Inc. in May 1996. Meritage Hospitality Group Inc. was founded in 1969 and is based in Grand Rapids, Michigan.
Company description, as reported by the company or data provider.
Revenue & earnings trend
FY2021 – FY2025 · reported fiscal years
Meritage Hospitality Group Inc reported revenue of $618M in FY2025 versus $577M in FY2021, a compound +1.7%/yr. Reported net income was −$31.7M in FY2025.
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Peer Group
Restaurants · 228 stocks
How this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.
Valuation Multiples vs Restaurants median · lower = cheaper
Strength profile in five axes (Snowflake)
Five quick dimensions, each 0 to 100: VALUE (fair-value potential), FUTURE (revenue growth), PAST (return on equity), HEALTH (low debt), DIVIDEND (yield). Green = this stock, grey = typical sector peer.
Values & ESG
Does this company touch areas you may want to avoid? The classification is inferred from sector and industry.
Similar stocks
10 more Restaurants stocks, each showing price versus our Fair Value estimate (as of Aug 27, 2026).
| Stock | Price | Fair Value | vs Fair Value |
|---|---|---|---|
| McDonald's Corporation MCD | $260.06 | $149.03 | −43% |
| Starbucks Corporation SBUX | $107.26 | $35.83 | −67% |
| Chipotle Mexican Grill, Inc CMG | $38.03 | $17.92 | −53% |
| Yum! Brands, Inc YUM | $153.31 | $58.17 | −62% |
| Restaurant Brands International Inc QSR | C$104.50 | C$36.37 | −65% |
| Darden Restaurants, Inc DRI | $218.86 | $173.68 | −21% |
| Yum China Holdings YUMC | $47.18 | $54.27 | +15% |
| Texas Roadhouse, Inc TXRH | $198.99 | $104.89 | −47% |
| Dutch Bros Inc BROS | $51.02 | $12.80 | −75% |
| Domino's Pizza, Inc DPZ | $332.06 | $227.31 | −32% |
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