BJ's Restaurants, Inc.
Thesis
BJ's Restaurants is overvalued given its current growth stage and the challenges it faces in expanding its restaurant count. The company is unlikely to reach its target of 300 locations due to limited real estate opportunities and declining same-store sales. The stock price does not reflect the stagnation in growth and the mediocre return on capital, making it a candidate for a short position.
Did it work?
The short thesis called for BJ's Restaurants to decline due to growth stagnation, limited unit expansion potential, and weak same-store sales. The stock has fallen 33.1% since the pitch, a decisive move in the direction of the short position and consistent with the thesis that the market was overvaluing the company's growth prospects. While the exact time elapsed is unknown, the magnitude of the decline strongly validates the core claim that the stock did not reflect the company's stagnation.