RCI Hospitality (RICK) on 11/12 and 11/13 saw 900 February $55 calls buy to open and currently 1300 in open interest as a $465K position, unusual activity in the name that rarely trades options. RICK shares put in a six-month based above the 61.8% Fibonacci and now back above AVWAP from the 2020 lows as shares are also clearing a 20-month downtrend and working out of the base.

Rick engages in businesses that offer live adult entertainment and/or high-quality dining experiences to its guests. RICK subsidiaries operate 56 establishments in 13 states (27 in Texas). RICK also operates a leading business communications company serving the multibillion-dollar adult nightclubs industry. RICK generates revenues through the sale of alcoholic beverages, food, and merchandise items; service in the form of cover charge, licensing fees, and room rentals; and through other related means such as ATM commissions and vending income, among others. Alcohol is 44% of sales and Service 40% with Food/Other the remainder. The Bombshells segment operates a restaurant and bar concept that sets itself apart with décor that pays homage to all branches of the U.S. military.

RICK has a market cap near $470M and trades 12.45X Earnings, 9X EBITDA, 20.9X FCF and 1.57X Sales. RICK revenues are seen rising 7% in FY25 with 20.88% EBITDA growth. RICK operates at high margins with fast inventory turns and owns most of its real estate. RICK share count has been moving lower and it has actively repurchased shares in 2024. RICK has also seen multiple insider buys in 2024. RICK intends to use FCF on buybacks and acquisitions moving forward.