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Here's Why You Should Retain Red Robin in Your Portfolio
Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB) is likely to benefit from its loyalty program and strategic initiatives. The emphasis on menu innovation and digital initiatives bodes well. Recently, the company launched the revamped Red Robin Royalty Program, marking a successful step in its strategy to revitalize the brand within the casual dining industry. RRGB is encouraged by the early progress and is confident that it has just begun tapping into its full potential.
Red Robin's shares have gained 22.9% in the past three months against the Zacks Retail – Restaurants industry's 4% fall. This Zacks Rank #3 (Hold) company's earnings estimates for fiscal 2025 showcase a growth rate of 59.1% year-over-year.
The upside is supported by its solid VGM Score of A, contributed by a Value Score of A and a Momentum and Growth Score of B. The positive trend signifies bullish analysts' sentiments, robust fundamentals and the continuation of an outperformance in the near term. However, increasing costs and expenses and high debt levels are impediments to its prospects.
Image Source: Zacks Investment Research
Let us discuss the factors highlighting why investors should retain the stock for now.
Growth Catalysts
Focus on Loyalty Program: A key long-term growth driver for the company is its guest loyalty program, Red Robin Royalty. The company engages guests through this program with offers designed to increase the frequency of visits. RRGB is focused on enhancing its ability to efficiently reach a broader audience through digital infrastructure and an omnichannel approach. The Red Robin Royalty Program is a valuable asset for the company, with membership now approaching 14 million guests. Historically, it has been underutilized, functioning more as a discount program rather than a driver of business growth.
RRGB is focused on enhancing its ability to ...