Breaking Down Biglari Holdings Inc. (BH) Financial Health: Key Insights for Investors

You're looking at Biglari Holdings Inc. (BH) and seeing a classic holding company puzzle: strong operational performance masked by volatile investment returns. The numbers from the third quarter of 2025 tell a clear, two-sided story you need to understand right now. On one hand, the core restaurant business, Steak n Shake, showed real resilience, with domestic same-store sales rising a strong 15.0% in Q3, helping drive total revenue up 10.3% to $99.74 million. But honestly, that operating strength was completely overshadowed by the investment portfolio, which posted a loss of $(14,406)k for the quarter, swinging the company to a Q3 net loss of $(5,291)k. Still, the long-term capital compounding story is what matters here, and the book value per Class A equivalent share stood at a solid $2,244.26 as of September 30, 2025, which is defintely the number to watch.

Revenue Analysis

If you're looking at Biglari Holdings Inc. (BH), the direct takeaway is that operational revenue is stabilizing and growing, but you have to look past the top-line number to see where the real work is happening. The company reported Q3 2025 revenue of $99.74 million, marking a solid 10.3% increase year-over-year, largely driven by its core restaurant segment.

Biglari Holdings Inc. (BH) is a diversified holding company, so its revenue isn't a single stream; it flows from three primary sources: casual dining restaurants, insurance, and media/direct marketing services. The restaurant segment, anchored by Steak 'n Shake, is defintely the most visible and volatile, while the insurance operations provide a more stable, float-driven component.

For the trailing twelve months (TTM) ending September 30, 2025, Biglari Holdings Inc. (BH) generated $386.51 million in total revenue, which represents a 6.87% growth rate over the prior year's TTM. This growth is a material shift from fiscal year 2024, when annual revenue was $362.11 million and actually saw a slight decline of -0.88%. That's a clear acceleration, and it tells you the operational improvements are starting to pay off.

Here's the quick math on the recent trend:

The significant change in the revenue streams comes down to the performance of the restaurant business. The Q3 2025 revenue jump was heavily influenced by a 15.0% rise in Steak 'n Shake's domestic same-store sales (SSS). That SSS growth is a huge number for a casual dining chain, and it suggests the shift toward a franchise-partner model and operational streamlining is gaining traction. The insurance segment is also cited as a strong contributor, but the restaurant turnaround is the story right now. You need to watch that SSS number closely; it's the heartbeat of their core operation.

What this estimate hides, however, is the exact dollar contribution from the non-restaurant segments like insurance. While the restaurant side is showing resilience, a diversified holding company like this needs consistent performance across all its business lines to truly maximize shareholder value. For a deeper dive into the ownership structure and management philosophy driving these segments, consider Exploring Biglari Holdings Inc. (BH) Investor Profile: Who's Buying and Why?

So, the near-term opportunity is clearly tied to the restaurant segment's continued momentum. The risk is that the high SSS growth rate is unsustainable or that the insurance business might underperform its peers. Finance: Model a scenario where Steak 'n Shake SSS reverts to the industry average of 5% by Q2 2026 by next Friday.

Profitability Metrics

You're looking for a clear picture of Biglari Holdings Inc. (BH)'s financial engine, not just the top-line revenue. Honestly, the profitability story here is one of high operational volatility, masked by the nature of a diversified holding company. The best way to map this is by looking at the Trailing Twelve Months (TTM) data ending around September 30, 2025, which gives us the most current, full-year picture we have.

The core takeaway is this: Biglari Holdings Inc. maintains a decent gross margin from its operations, but the true bottom line-net profit-is razor-thin and highly susceptible to investment swings. For the TTM period, the company reported total revenue of approximately $386.51 million. Here's the quick math on the key margins:

The drop from a 38.28% gross margin (gross profit / revenue) to a 6.19% operating margin (operating income / revenue) tells you where the operational costs hit hardest. This is the operational efficiency story: the cost of goods sold (COGS) is managed well enough, but selling, general, and administrative (SG&A) expenses eat up a significant chunk of the revenue. That's a clear area for management to defintely focus on.

Operational Efficiency and Industry Benchmarks

When you look at the 38.28% gross margin, it's a bit worse than the sector median of 44.19%, which suggests there's room for improvement in cost management, particularly within the restaurant segment, Steak n Shake, and its insurance operations. Still, the underlying core business shows signs of life. For example, Steak n Shake's same-store sales for domestic company-operated and franchise-partner-operated restaurants rose by a solid 15.0% in the third quarter of 2025. That's a concrete operational win.

The real issue is the net profit margin (net income / revenue) of just 0.54% for the TTM period. This is dramatically lower than the industry median net profit margin of 7.49%. Why the huge gap? It's the investment component of Biglari Holdings Inc. As a holding company, its net earnings are heavily influenced by investment gains and losses, which can swing wildly.

• Monitor the investment portfolio's impact on net income.
• Track Steak n Shake's same-store sales growth as a core operational health indicator.
• Watch the SG&A expense line for signs of improved cost control.

Profitability Trends and Near-Term Risk

The trend in profitability is volatile, and that's the realist view you need to adopt. While the TTM net margin of 0.54% is low, it represents a significant swing from the recent past. The company reported a net loss of $(5.291) million in the third quarter of 2025 alone, a sharp contrast to the $32.125 million net earnings in the same quarter of 2024. This recent loss was primarily driven by $14.406 million in investment losses.

What this estimate hides is the true earnings power of the operating businesses without the noise of the investment portfolio. The pre-tax operating earnings for the first nine months of 2025 were $20.521 million, up from the $3.272 million in the same period of 2024. This suggests the operating businesses are actually improving, even as the investment arm creates short-term losses. So, the near-term risk is clearly tied to market volatility impacting the investment portfolio, but the operational opportunity is in the restaurant and insurance segments. For a deeper dive into the company's full financial picture, you should check out the full analysis at Breaking Down Biglari Holdings Inc. (BH) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

You're looking at Biglari Holdings Inc. (BH)'s balance sheet to understand how the company funds its diverse operations-from Steak n Shake to property and casualty insurance. The direct takeaway is that Biglari Holdings Inc. maintains a relatively conservative debt profile compared to its industry peers, relying more heavily on retained earnings and equity for capital. This is a key characteristic of a holding company focused on intrinsic value.

As of September 30, 2025, Biglari Holdings Inc.'s shareholders' equity stood at $580.3 million. Meanwhile, total liabilities were $499.2 million. This gives us a total Debt-to-Equity (D/E) ratio of approximately 0.86 ($499.2M / $580.3M), meaning the company has about 86 cents of debt for every dollar of shareholder capital. That's a low-leverage position.

• Total Liabilities (Q3 2025): $499.2 million.
• Shareholders' Equity (Q3 2025): $580.3 million.
• Calculated D/E Ratio: 0.86.

To be fair, the D/E ratio can be tricky because Biglari Holdings Inc. is a conglomerate. If you compare the 0.86 D/E ratio to the median for the U.S. Eating and Drinking Places industry, which was around 2.01 in 2024, Biglari Holdings Inc. is significantly less leveraged. This low leverage is a deliberate strategy, reflecting a preference for financial stability over aggressive debt-fueled growth, and it aligns with the company's focus on long-term value creation, as detailed in their Mission Statement, Vision, & Core Values of Biglari Holdings Inc. (BH).

Recent Debt and Financing Activity

The most significant recent financing event was a substantial debt issuance. In the first nine months of 2025, Biglari Holdings Inc.'s financing activities surged, driven by a new term loan for its core restaurant business, Steak n Shake. This is a clear example of using targeted debt to fund a specific subsidiary's operational needs and turnaround efforts.

Here's the quick math on the major new debt:

The new $225 million loan at 9% interest is a material change, leading to a notable increase in total liabilities. This move injects capital directly into a key operating segment, but the 9% rate reflects a higher cost of borrowing, which is a near-term risk to monitor. The company is defintely balancing the cost of debt against the need for capital to revitalize Steak n Shake, showing a tactical shift in their capital structure to support a turnaround. They are using debt to accelerate the core restaurant's transition to a franchise-partner model.

Balancing Debt and Equity Funding

Biglari Holdings Inc. balances its capital structure by keeping its debt load manageable while also consistently engaging in share repurchases, a key equity action. The low D/E ratio suggests a strong preference for equity funding, primarily through retained earnings and the capital generated by its insurance and investment segments. The company's strategy is often to use internally generated cash flow and a conservative balance sheet to fund acquisitions and growth, only taking on large, specific debt-like the Steak n Shake loan-when a clear, high-return opportunity exists within a subsidiary.

This approach gives them significant financial flexibility (a large debt capacity) that many highly-leveraged competitors lack. What this estimate hides, however, is the potential for significant investment losses, which can immediately erode the equity base, as the company saw investment partnership losses of $(7.0) million year-to-date in 2025, which would inflate the D/E ratio even without new debt.

Liquidity and Solvency

You're looking at Biglari Holdings Inc. (BH) and wondering if the company has enough short-term firepower to cover its bills. The direct takeaway is that BH's liquidity position has dramatically improved in the first nine months of 2025, largely due to a major financing transaction, shifting the company from a moderate to a highly liquid stance.

Current and Quick Ratios Signal Strong Liquidity

Liquidity ratios-the Current Ratio and Quick Ratio (Acid-Test Ratio)-measure a company's ability to pay off its short-term debts. A ratio over 1.0 is generally seen as healthy. By the end of the second quarter of 2025, Biglari Holdings Inc.'s liquidity was solid, but the third quarter saw a massive influx of cash that fundamentally changed the picture.

Here's the quick math: The company's cash and cash equivalents surged to $272.5 million as of September 30, 2025, up from just $30.7 million at the end of 2024.

Assuming the non-cash current assets and current liabilities remained relatively stable from the Q2 2025 figures, this cash injection would have propelled the liquidity ratios well above the typical benchmark of 2.0x for the Current Ratio and 1.0x for the Quick Ratio. This is a defintely strong liquidity position.

• Current Ratio: The estimated ratio for Q3 2025 is approximately 3.28x.
• Quick Ratio: The estimated ratio for Q3 2025 is approximately 3.25x.

Analysis of Working Capital Trends

Working capital (Current Assets minus Current Liabilities) is the net operating liquidity you have on hand. The trend here is overwhelmingly positive, driven by the financing activity. The significant jump in cash means a substantial increase in working capital, giving Biglari Holdings Inc. considerable flexibility to fund operations, pursue strategic investments, or weather unexpected downturns.

What this estimate hides is the potential for current liabilities to have also increased, but the primary driver of the overall liabilities jump was a $225 million long-term note payable for Steak n Shake, which is non-current debt and therefore doesn't hurt the working capital calculation. The company's focus on maintaining a strong balance sheet is clear, as detailed in the Mission Statement, Vision, & Core Values of Biglari Holdings Inc. (BH).

Cash Flow Statements Overview

Looking at the cash flow statement for the first nine months of 2025 (YTD Q3 2025) reveals the sources of this enhanced liquidity:

The operating cash flow of $89.2 million (OCF) for the first nine months of 2025 shows the underlying businesses are generating substantial cash, which is a great sign of operational health. However, the massive boost to the cash position-and thus liquidity-came directly from the $188.7 million in financing activities, essentially borrowing to increase cash on hand.

Potential Liquidity Concerns or Strengths

The core strength is the sheer volume of cash: $272.5 million on the balance sheet as of September 30, 2025, which gives the company a substantial buffer. The primary potential concern is the source of the liquidity boost. While the financing provided immediate liquidity, it also increased the total debt load. The long-term debt (non-current liabilities) rose significantly due to the new $225 million loan. You need to monitor how management uses this cash-it must be deployed into high-return investments or business improvements to justify the increased interest expense.

The consistent positive OCF, though, suggests the underlying business is not dependent on external financing for day-to-day operations. That's the kind of operational strength a seasoned analyst looks for.

Valuation Analysis

You're looking at Biglari Holdings Inc. (BH) and trying to figure out if the market price makes sense. The direct takeaway is this: Biglari Holdings Inc. appears undervalued on a Price-to-Book (P/B) basis, but its extremely high trailing Price-to-Earnings (P/E) ratio suggests a serious issue with recent earnings quality, making a clear valuation call difficult.

The company's structure, with Class A (BH.A) and Class B (BH) shares, complicates things, but the core metrics for the Class B shares show a mixed picture. As of mid-November 2025, the Class B stock was trading around $316.80.

Key Valuation Multiples (2025 Fiscal Data)

When you look at the standard valuation multiples, you see immediate red flags and green lights. The high P/E ratio is a major concern, but the P/B ratio tells a different story about the underlying assets.

Here's the quick math on the P/B ratio: The book value per Class A Equivalent share was $2,244.26 as of September 30, 2025. Since a Class B share is 1/5th the economic right of a Class A share, the equivalent book value for a Class B share is roughly $448.85. Trading at $316.80, the stock is trading below its book value per share, which is a classic value signal. Still, you have to dig into why earnings are so low.

• P/E Ratio (Trailing): 464.06 for BH Class B. This is defintely a warning sign.
• P/B Ratio: 1.67 for BH Class B.
• Enterprise Value-to-EBITDA (EV/EBITDA): 14.81 for BH Class B.

The trailing Price-to-Earnings (P/E) ratio of 464.06 is astronomical. This metric compares the current stock price to the company's past 12 months of earnings per share. A number this high means Biglari Holdings Inc. had very low trailing earnings, or even a small loss, which makes the ratio nearly meaningless for comparison. In contrast, the Price-to-Book (P/B) ratio of 1.67 is much more reasonable for a holding company with significant investment assets.

Stock Performance and Analyst View

The stock price trend over the last 12 months shows volatility, but also a strong recovery from the low. The Class B shares (BH) had a 1-year trading range between a low of $189.21 and a high of $381.83. The current price of $316.80 sits well above the low, but still significantly below the high, suggesting the market has priced in some uncertainty since the peak.

On the income side, Biglari Holdings Inc. does not currently pay a common dividend, as indicated by an 'n/a' for the ex-dividend date. So, your return will be purely based on capital appreciation, not income.

Analyst consensus is cautious. Wall Street Zen recently downgraded the stock to a Hold rating as of November 16, 2025. Technical analysis for the Class A shares (BH.A) also showed 'sell signals' from both short and long-term Moving Averages, leading to a 'negative evaluation' from one service. This tells you the market is not exactly rushing to buy right now. For a deeper dive into the operational risks driving these numbers, you should check out the full post on Breaking Down Biglari Holdings Inc. (BH) Financial Health: Key Insights for Investors.

Next Step: Review the Q3 2025 10-Q to isolate operating earnings from investment gains to get a clearer picture of the P/E ratio's true meaning.

Risk Factors

You're looking at Biglari Holdings Inc. (BH) and seeing a diversified holding company, but you need to know where the real pressure points are, especially with the mixed financial signals from the third quarter of 2025. The core takeaway is this: while their operating businesses are holding up, the volatility in their investment portfolio is a major drag, and it's a risk they take on purpose.

Honestly, the biggest near-term risk is the performance of the investment portfolio. In the third quarter of 2025 alone, Biglari Holdings Inc. reported investment losses of $(14,406) thousand, which directly led to a net loss of $(5,291) thousand for the quarter. To be fair, over the first nine months of 2025, the total investment losses were a more manageable $(4,154) thousand, but that quarter-to-quarter swing shows you the concentration risk in their holdings. This is a classic risk of a holding company model-the investment side can completely overshadow the operating businesses.

Here's a quick map of the key risks across their business segments, pulled from recent filings:

• Investment Portfolio Volatility: Concentration risk means large, sudden losses are defintely possible.
• Insurance Catastrophe Exposure: The property and casualty insurance business is always vulnerable to large, unpredictable losses from natural disasters.
• Restaurant Competition: Steak n Shake faces intense competition and commodity price fluctuations, though same-store sales rose 15.0% in Q3 2025.
• Oil and Gas Price Swings: The recent acquisition of Abraxas Petroleum exposes them to volatile oil and gas commodity prices.

The company's operational and financial risks, highlighted in SEC filings, demand your attention. One major internal issue is the disclosure of a material weakness in internal control over financial reporting. That's a serious red flag because it increases the risk of financial misstatement. Plus, the Return on Capital Employed (ROCE) for the trailing twelve months to March 2025 was a low 2.9%, which is far below the hospitality industry average of 10%. That tells you the capital they employ isn't generating great returns.

The strategic risks are tied to the regulatory environment and their own structure. Changes in state insurance laws or restaurant regulations could hit their operating margins hard. Also, the company's structure, which includes a significant investment portfolio, carries the risk of being deemed an unregistered investment company under the Investment Company Act.

Biglari Holdings Inc. is taking clear actions to mitigate some of these financial and operational risks. They are actively managing capital and enhancing liquidity. For instance, in September 2025, the Steak n Shake subsidiary secured a $225 million loan at an 8.80% interest rate, with the proceeds going to the parent company. This gives them a cash injection to play with. They also continue to push the Franchise Partner Program at Steak n Shake, which shifts capital expenditure and operational risk away from the corporate balance sheet, requiring a small $10,000 upfront investment from the partner. That's smart risk-shedding.

The company's diversification across restaurants, insurance, oil and gas, and brand licensing is itself a long-term mitigation strategy against a downturn in any single sector. You can read more about their approach to business and value creation here: Mission Statement, Vision, & Core Values of Biglari Holdings Inc. (BH).

What this estimate hides is the potential for a massive, single-event loss in the insurance business, which no amount of financial engineering can fully offset. Your action item is clear: track the quarterly investment results closely, as they are the most immediate source of earnings volatility.

Growth Opportunities

You're looking past the volatile investment gains and losses to see what the core Biglari Holdings Inc. (BH) businesses can actually do, and honestly, that's the right move. The company's future growth hinges on two clear operational drivers: the shift in its restaurant model and the scalable nature of its insurance segment.

The strategic focus is on maximizing cash flow from the legacy assets, which is a classic holding company play. For the first nine months of 2025, Biglari Holdings Inc. reported net earnings of $12.365 million, up significantly from $6.514 million in the same period in 2024, showing a clear, if bumpy, operational improvement trajectory.

The primary growth engine, Steak n Shake, is undergoing a major shift to a franchise-partner model (a form of capital-light growth). This strategy aims to unlock capital and revitalize the brand, and it's showing results where it counts: domestic same-store sales for Steak n Shake jumped 15.0% in the third quarter of 2025. That's a defintely strong number, even if pre-tax operating earnings for the restaurant segment have been challenged by rising costs.

Here's the quick math on the core segments' recent performance, isolating the operating business from the noise of investment swings. This table uses the first nine months of 2025 data in thousands of dollars:

What this estimate hides is the significant capital allocation move made in Q3 2025. Steak n Shake secured a new $225 million loan at an 8.80% interest rate in September 2025, with proceeds distributed to Biglari Holdings Inc. This move provides substantial liquidity for future acquisitions or share repurchases, which is a key part of the holding company's value creation strategy.

The competitive advantages that position Biglari Holdings Inc. for growth are clear and structural:

• Diversified Revenue Streams: Mitigating risk across restaurants, insurance, and oil & gas.
• Scalable Insurance Model: First Guard Insurance uses a direct-to-customer model, insuring over 17,000 trucks and trailers.
• Centralized Capital Allocation: Sardar Biglari's control allows for swift, consistent investment decisions.
• Strong Cash Flow: Generating approximately $18 million in annual free cash flow, with 25.5% year-over-year growth.

Also, keep an eye on the insurance segment. While it only contributed $18.82 million to Q2 2025 revenue, its low-cost digital distribution is built to scale, plus there's a massive opportunity to invest in technology, like artificial intelligence and big data analytics, to enhance operations. That's where the real margin expansion will come from. If you want to dive deeper into who's betting on this strategy, you should check out Exploring Biglari Holdings Inc. (BH) Investor Profile: Who's Buying and Why?

Next Step: Portfolio Managers should model a 12-month earnings scenario that assumes a 10% annual revenue growth in the insurance segment and a 5% margin improvement in the franchised restaurant segment by Q4 2026.