RCI Hospitality: Concerning Trends Beneath Improved Q3 Financials

Caffital Research 2.12K Followers Follow Summary RCI Hospitality Holdings, Inc. reported an improvement in its fiscal Q3 earnings performance. Underlying concerns remain. Nightclub sales were boosted by acquisitions, and Bombshells' traffic improvement reflects a temporary sports boost. Due to weak underlying trends, I estimate RICK stock to have -17% downside to $23.2. halbergman/E+ via Getty Images RCI Hospitality Holdings, Inc. ( RICK ) reported the company’s fiscal Q3 results from the April-June period on the 6 th of August. The nightclub and Bombshells operator’s overall financial performance improved significantly, but likely due to This article was written by Caffital Research 2.12K Followers Follow I am an avid investor with a major focus on small cap companies with experience in investing in US, Canadian, and European markets. My investment philosophy to generating great returns on the stock market revolves around identifying mispriced securities by understanding the drivers behind a company's financials, and ultimately, most often revealed by a DCF model valuation. This methodology doesn't limit an investor into rigid traditional value, dividend, or growth investing, but rather accounts for all of a stock's prospects to determine the risk-to-reward. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.