Research from Water Tower Research, Water Tower Research

Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Research from Water Tower Research

Equity Research Firm

Equity Bottom-Up

RCI Hospitality Holdings / Equity Bottom-Up

<div><div><div><div><ul style="list-style-type: disc;"><li><p>Multiple Catalysts on the Horizon. Total revenues were essentially in line with our forecast, and we see an attractive runway for growth with at least 10 new locations contributing to revenues through FY24: (1) 4Q23: First full quarter of another Baby Dolls, the reopening of a closed club, and the opening of a new Bombshells, all in Texas; (2) FY24: Opening of two new clubs in Texas, three new Bombshells in Texas and Colorado, and two casinos in Central City, CO. Potential club M&amp;A activity could provide additional upside.</p></li><li><p>Potential club M&amp;A activity could provide additional upside.</p></li><li><p>Nightclubs + Bombshells’ sales increased 8.9% Y/Y. On July 11, RCI announced its preliminary revenues for nightclubs and Bombshells.</p></li></ul></div></div></div></div>

Multiple Catalysts on the Horizon. Total revenues were essentially in line with our forecast, and we see an attractive runway for growth with at least 10 new locations contributing to revenues through FY24: (1) 4Q23: First full quarter of another Baby Dolls, the reopening of a closed club, and the opening of a new Bombshells, all in Texas; (2) FY24: Opening of two new clubs in Texas, three new Bombshells in Texas and Colorado, and two casinos in Central City, CO. Potential club M&amp;A activity could provide additional upside.Potential club M&amp;A activity could provide additional upside.Nightclubs + Bombshells’ sales increased 8.9% Y/Y. On July 11, RCI announced its preliminary revenues for nightclubs and Bombshells.

RCI Hospitality Holdings, Inc. - Revenues Meet Expectations