Red flags: 1. Mis­lead­ing earn­ings: BJRI reported a $3mm increase in GAAP earn­ings while our model shows eco­nomic earn­ings declined by $2mm (a dif­fer­ence of $5mm or nearly 40% of reported net income) during the last fiscal year. 2. Very dan­ger­ous val­u­a­tion: stock price of $34 implies BJRI must grow its NOPAT at over 20% com­pounded annu­ally for 15 years. A 15-year growth appre­ci­a­tion period with a 20%+ com­pound­ing growth rate sets expectations for future cash flow performance quite high. Historical growth rates are much lower. 3. Free cash flow was -$83mm or -11% of the company’s enterprise value last year. 4. Off-balance sheet debt of $265mm: 79% of net assets and 25% of market value. 5. Outstanding stock option liability of $44mm or 5% of current market value.