Is Red Robin Gourmet Stock a Buy?

Over the last few years, I've postulated that a restaurant industry bubble -- driven by better-burger upstarts in particular -- was brewing. I never would have guessed a pandemic was what would stem the tide of restaurant real estate expansion at ever-lower profit margins.

Heading into 2020, Red Robin Gourmet Burgers (NASDAQ: RRGB) was already struggling under the weight of heightened competition. Having lost 88% of its value over the last trailing five-year stretch, this burger stock could be a recovery candidate. But at this juncture, it looks like more of a gamble than compelling long-term value.

It would only be fair to point out that Red Robin was already hurting before the pandemic sent the world reeling early this year. Over the last decade, the casual diner has run operating profit margins in the mid-single-digit percentages, but that already slim bottom line started to deteriorate a few years ago -- as did revenue.

Source Fool.com