Brinker International Inc. Common Stock (EAT)

FairStock Score: 64/100 — STEADY

Key Financials

Strengths

• Generates $303 million in annual free cash flow (4.7% yield on market cap)
• Strong Piotroski F-Score of 9/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• High return on equity of 177.8% demonstrating efficient capital deployment
• Established organization with 83,840 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($44) with negative 236% margin of safety—limited downside protection
• High leverage at 4.65x debt-to-equity increases financial risk and interest expense burden

AI Analysis

Brinker International Inc. Common Stock is a small-cap consumer cyclical company valued at $6.5 billion. The business generates $5.7 billion in annual revenue with a 2.3% net margin and $303 million in free cash flow. From a quality standpoint, Brinker shows near-perfect Piotroski F-Score of 9/9 indicating exceptional financial health and Altman Z-Score of 2.4 in the grey zone. On valuation, the stock is attractively valued at 14.5x earnings, with trades far above its Graham Number ($44) with no margin of safety. Growth dynamics show revenue growing at 6.9% and profit growth of 8.4%. Our composite FairStock Score of 64/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

The market underappreciates Brinker's consistent 178% ROE at just 15x earnings—a re-rating toward sector peers could unlock 30-50% upside. With $303 million in annual free cash flow (4.7% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 4.7x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer