Rick's Cabaret to Open in Manhattan: Upgrade from Hold to Buy
Summary: On September 7th, Rick's Cabaret International, Inc. [DBA: Rick's Cabaret] will open its first location in New York. While market-wide flaccidity risks exist, Thrillist considers Rick's to have tremendous potential for growth. Rick's has enjoyed a presence in the Nudie Market [NM] since 1984. It emerged as an industry leader in 1995 by becoming the first topless establishment to sell itself publicly through an IPO. Since then, concerns about Rick's ability to overcome a resurgence in prudishness, exemplified by nationwide strictures on "customer contact", have proven unfounded, as the company has inserted itself smoothly into openings in the Southern and Midwestern markets
Past Earnings: On August 15, 2005, the Company reported impressive third quarter consolidated total revenues of $3,729,011. Revenues should be further bolstered by the NYC club's Cover Charge After Tax and Before Drinks (CCATABD) of $25, Cocktail Index (CI) of $12.50 and Erotic Table Dance Coefficient (ETDC) of $20
Projected Growth: After careful analysis, we feel Rick's is primed for explosive profits. Key profit centers include:
- Three-tiered facility: 1st floor main stage; 2nd floor restaurant, serving luxury commodities (steak, lobster) 'til 4am; and 3rd floor VIP suite, where inflated consumer estimates of end-use satisfaction should fuel huge earnings.
- A strong product pipeline (200 "entertainers") that should capitalize on an under-serviced marketplace
- Heaving breasts*
Based upon the above considerations, we strongly advise holding the stock when bouncers are not looking and watching it closely when they are. Positions should be reassessed over dinner, before allowing irrational exuberance to cause you to flood the marketplace with slightly sweaty $20s 'til the closing bell
Analyst Certification: We, The Thrillist Financial Advisory Board, hereby certify that all the views expressed in this research report accurately reflect our desire for free lap-dances at Rick's.