What the heck happened to Noodles & Co? When this company came public in 2013, it was one of the hottest IPOs of the year. Now Jim Cramer considers it one of the biggest dogs—not only for the restaurant sector, but perhaps the entire market!
When Noodles initially went public, it talked a big game. The stock almost tripled in the first few days of trading, then spent the next six months trading sideways. Once the lockup on insider selling expired, it got totally pummeled.
As the two-year anniversary of going public approaches, the stock is down some 20 percent from where it came public.
Has one of the hottest IPOs of 2013 now gone completely cold? How could investors have been so excited about a company that turned out to be nothing but a wet fish?
In Cramer's perspective, the main reason it has underperformed is pretty simple. The company just hasn't met Wall Street's expectations, both on the bottom and top line. It has completely failed to establish a positive trend for same-store- sales growth, despite management's overly optimistic guidance.
"I think you can boil down all of the problems with Noodles to one key issue, which is that management was way too optimistic and promotional during the honeymoon period after the company came public," Cramer added.