Shares of Benihana (NASDAQ:BNHN) have been on a roller coaster ride over the past month --bottoming out with a pessimistic forecast for Wall Street and rising again when the company posted its real numbers.

Back on May 19, the shares were skewered hibachi style after the company announced it would miss analyst expectations for the fourth quarter. When it said earnings would come in at $0.31 to $0.33 per share versus the $0.34 to $0.36 projected earlier, the stock dropped by 23%. But on Thursday, reported earnings were $0.35, or within original guidance. The stock was up 7.5% as a result and is up another 6% as of this writing. It appears that the company should have let yesterday's strong results speak for themselves.

For the year, total sales grew 12.6%, with same-store sales increasing by an impressive 8.7%. Diluted earnings grew by 46%, after taking out an impairment charge from last year, and even though there were 5% more shares outstanding. Overall, the company has a solid track record of profitable growth, and its restaurants generate plenty of operating cash flow, though most capital is reinvested into growing and improving its store base. As a result, free cash flow is minimal but at an expected level for a growing company.

With $244 million in sales for the full year, Benihana still has room to grow. It also has a number of growing store concepts, which each grew by more than 20% and together accounted for 22% of total sales for the year. Ra Sushi was the standout store concept, growing at 42% for the year and reporting a 30% same-store-sales increase.

Even better news is that the company should be able to continue expanding unabated. There are only 56 namesake stores, seven Haru stores, and 10 Ra Sushi concepts. These stores are company-owned, and there are about 22 franchised stores throughout North and South America. What's more, Benihana restaurants are experiencing improving sales and margins as management remodels certain locations and is seeing stronger sales as a result. And analysts believe Ra can grow five to six times -- to a couple of hundred stores -- in the next five years.

The publicly traded restaurant space is very crowded and competitive, with certain companies struggling for growth or for their next concept. Brinker (NYSE:EAT) and its Chili's and Macaroni Grills, OSI Partners (NYSE:OSI) with its Outback Steakhouses, and Darden (NYSE:DRI) with its Olive Garden and Red Lobster stores are just a few on the list. Conversely, there are others with very bright growth outlooks, such as Cheesecake Factory (NASDAQ:CAKE), PF Chang's (NASDAQ:PFCB), and Buffalo Wild Wings (NASDAQ:BWLD). With low barriers to entry in this industry, economic moats and subsequent sustainable competitive advantages are hard to maintain. Fortunately for Benihana, its restaurants do have a certain amount of differentiation -- it has two of the few, and perhaps only, branded sushi chains and an equally unique teppanyaki concept, with an offering of Japanese food prepared by a chef at a table grill surrounded by customers.

It's also worth noting that a company called BFC Financial holds approximately 10% of Benihana, 23% of its voting control, a number of board seats, and some of the chain's convertible preferred stock. BFC first took a stake in the company in 2004 and is helping it expanding its store concepts.

There are only a couple of analysts following Benihana, and based on their earnings estimates for next year, the company is trading at a forward price-to-earnings ratio of 18 to 20. They also project that Benihana can grow by 20% to 25%. If that turns out to be the case, the valuation is probably low and the shares are worth watching.

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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned The Fool has an ironclad disclosure policy.