Our $96 target price is based on 32.5x our NTM, 12 months from now, adjusted EBITDA estimate, or ~2.2x the market multiple. The relative multiple vs. the S&P 500 is below fast-growing restaurant concepts and below the 3-year average (~3.4x), which we believe fairly reflects choppy marign performance and unknowns related to tariff risks.

This stock is High Risk based upon our quantitative model as well as the company's small US store base relative to more established casual dining peers.

Risks to KRUS not achieving our target price: (1) A slowdown in consumer spending impacting demand. (2) Unexpected pressure on commodities and/or labor without the ability to price to offset it. (3) Challenges securing real estate at reasonable prices to support unit growth. (4) Another established Japanese sushi operator starting to expand in the US. (5) A food safety incident at the brand impacting demand or a publicized food safety incident at an unrelated sushi player impacting category demand. (6) Short-term disruptions due to weather given a very concentrated footprint. (7) New store growth is not self-funded by cash from operations.

Conversely, if any of these factors proves to have less of an effect than we anticipate, the stock could outperform our target.