Education
About Us
Working with TipRanks
Follow Us
Papa John's International (PZZA)
:PZZA
Top Page
Papa John's International
(NASDAQ:PZZA)67Neutral
Positive Factors
Brand Repositioning
PZZA has made meaningful strides repositioning the brand following historical challenges, building a stronger foundation to realize unit growth, comp momentum, and cash returns to shareholders over a multi-year time horizon.
Valuation
The current valuation is seen as overly pessimistic regarding management's ability to reaccelerate growth over the medium- to longer-term.
Negative Factors
2025 Guidance
PZZA provided 2025 guidance below consensus for unit growth and EBITDA.
Papa John's International (PZZA) vs. S&P 500 (SPY)
Market Cap
$1.52B
Dividend Yield3.94%
Average Volume (3M)1.85M
Price to Earnings (P/E)18.4
Beta (1Y)1.00
Revenue Growth-3.57%
EPS Growth2.31%
CountryUS
Employees13,200
SectorConsumer Cyclical
Sector Strength53
IndustryRestaurants & Bars
Share Statistics
EPS (TTM)2.53
Shares Outstanding32,661,037
10 Day Avg. Volume1,367,029
30 Day Avg. Volume1,851,582
Financial Highlights & Ratios
PEG Ratio7.95
Price to Book (P/B)N/A
Price to Sales (P/S)0.74
Price to Cash Flow (P/CF)7.50
P/FCF Ratio7.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$55.40Price Target Upside23.69% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Papa John's International Business Overview & Revenue Model
Company DescriptionPapa John's International, Inc. (PZZA) is a leading global pizza delivery and carryout chain, known for its commitment to quality ingredients and superior customer service. Headquartered in Louisville, Kentucky, the company operates in the quick-service restaurant sector, offering a diverse menu predominantly featuring pizzas, alongside side items such as breadsticks, wings, and desserts. Papa John's is recognized for its 'Better Ingredients. Better Pizza.' brand promise, and operates and franchises thousands of retail locations worldwide.
How the Company Makes MoneyPapa John's International generates revenue primarily through the sale of pizzas and related items at both company-owned and franchised stores. A significant portion of its income comes from franchise royalties and fees, which are collected from franchisees based on a percentage of their sales. The company also makes money through the sale of food and supplies to its franchised stores, leveraging its supply chain operations. Additionally, partnerships with delivery platforms and strategic marketing initiatives contribute to its revenue streams by enhancing its market reach and customer engagement.
Papa John's International Financial Statement Overview
Summary
Papa John's shows solid revenue growth and operational efficiency, but faces increasing cost pressures and a declining net profit margin in 2024. The balance sheet is concerning with negative equity and rising debt, which presents financial risks. Cash flow management is strong, though recent declines warrant attention. Overall, financial stability challenges are evident despite a robust market position.Income Statement
Papa John's shows consistent revenue growth over the years, with a notable increase from 2019 to 2023. However, in 2024, there was a slight decline in revenue. The gross profit margin has improved over time, peaking in 2023. Despite a strong gross margin, the net profit margin dropped in 2024, indicating increased expenses or cost pressures. EBIT and EBITDA margins have shown variability, with EBITDA margins remaining relatively stable, suggesting operational efficiency. Overall, the income statement reflects a solid growth trajectory but highlights potential cost challenges in the latest fiscal year.75
Positive
Balance Sheet
The balance sheet reveals a concerning negative equity position, which has worsened over the years. This is due to significant liabilities outpacing assets. The debt-to-equity ratio is not calculable due to negative equity, but the increasing total debt indicates rising leverage. The return on equity (ROE) is positive but volatile due to fluctuating net income and negative equity. The equity ratio is negative, showing financial instability. While the company manages its debt, the negative equity situation poses a risk.50
Neutral
Cash Flow
Operating cash flow has remained robust, demonstrating the company's ability to generate cash from operations. However, free cash flow has fluctuated, with a significant decrease in 2024. The free cash flow to net income ratio indicates that free cash flow is consistently above net income, a positive sign. The operating cash flow to net income ratio has been healthy, though it declined in 2024. Overall, cash flow management is solid, though recent declines warrant attention.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.06B | 2.14B | 2.10B | 2.07B | 1.81B | Gross Profit |
| 580.96M | 657.07M | 390.54M | 429.32M | 344.20M | EBIT |
| 156.70M | 147.14M | 109.03M | 168.24M | 90.25M | EBITDA |
| 226.11M | 212.50M | 161.06M | 217.06M | 137.02M | Net Income Common Stockholders |
| 83.32M | 82.10M | 67.77M | 120.02M | 57.93M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 37.95M | 40.59M | 47.37M | 70.61M | 130.20M | Total Assets |
| 888.95M | 875.00M | 864.23M | 885.70M | 872.77M | Total Debt |
| 229.48M | 965.72M | 807.26M | 685.50M | 513.57M | Net Debt |
| 191.52M | 925.13M | 759.89M | 614.89M | 383.37M | Total Liabilities |
| 1.30B | 1.32B | 1.13B | 1.05B | 1.14B | Stockholders Equity |
| -413.31M | -459.09M | -286.39M | -172.46M | -266.94M |
| Cash Flow | Free Cash Flow | |||
| 34.15M | 116.44M | 39.42M | 116.12M | 150.79M | Operating Cash Flow |
| 106.63M | 193.06M | 117.81M | 184.68M | 186.44M | Investing Cash Flow |
| -17.35M | -75.12M | -62.79M | -63.51M | -41.07M | Financing Cash Flow |
| -91.67M | -124.08M | -76.24M | -180.53M | -43.46M |
Papa John's International Technical Analysis
Negative
44.79
Price Trends
41.43
Positive
45.43
Negative
45.53
Negative
Market Momentum
1.35
Positive
50.51
Neutral
22.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PZZA, the sentiment is Negative. The current price of 44.79 is below the 20-day moving average (MA) of 45.42, above the 50-day MA of 41.43, and below the 200-day MA of 45.53, indicating a neutral trend. The MACD of 1.35 indicates Positive momentum. The RSI at 50.51 is Neutral, neither overbought nor oversold. The STOCH value of 22.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PZZA.
Papa John's International Risk Analysis
Papa John's International disclosed 37 risk factors in its most recent earnings report. Papa John's International reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Papa John's International Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $72.06B | 48.11 | 45.67% | ― | 14.61% | 25.68% | |
75 Outperform | $44.21B | 30.38 | -19.43% | 1.72% | 6.68% | -7.09% | |
72 Outperform | C$42.81B | 21.76 | 32.83% | 3.57% | 21.63% | -14.75% | |
71 Outperform | $16.52B | 28.86 | -14.74% | 1.25% | 5.07% | 13.74% | |
67 Neutral | $1.52B | 18.37 | -20.16% | 3.94% | -3.57% | 2.31% | |
61 Neutral | $6.58B | 62.03 | -16.09% | 0.43% | 36.03% | 57.51% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% |
* Consumer Cyclical Sector Average
Performance Comparison
PZZA
Papa John's International
44.79
-23.57
-34.48%
CMG
Chipotle
53.60
-0.20
-0.37%
DPZ
Domino's Pizza
476.18
34.80
7.88%
YUM
Yum! Brands
159.37
22.51
16.45%
WING
Wingstop
230.60
-137.80
-37.40%
TSE:QSR
Restaurant Brnd International
95.60
-10.68
-10.05%
Papa John's International Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -3.14% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed sentiment with notable achievements in international growth and successful marketing initiatives countered by declines in North American sales and challenges with commodity costs. Despite strategic enhancements and future plans for investment, the pressure on sales and margins created a balanced outlook.Highlights
Strong International Growth
International comparable sales were up 2% year-over-year in Q4 2024, with significant growth in key markets like the Middle East, showing a 20% increase, and strong performance in Latin America with high single-digit to low double-digit growth.
Successful Marketing Initiatives
The 'Meet the Makers' campaign launched successfully, focusing on the quality and craftsmanship of Papa John's pizzas. The company invested $4 million in incremental marketing in Q4 and plans up to $25 million more in 2025.
Loyalty Program Enhancements
Revamped loyalty program led to increased engagement, with 50% of loyalty orders now redeeming Papa Dough, up from 21% a year ago.
Record New Restaurant Openings
Opened more than 300 new restaurants globally in 2024, including the 6,000th restaurant, marking an important growth milestone. Significant cost reductions were achieved in building new company-owned restaurants.
Lowlights
Decline in Global System-Wide Sales
Global system-wide restaurant sales were $1.23 billion, down approximately 8% in constant currency, primarily due to the additional week of operation in the prior year.
North America Comparable Sales Decline
North America comparable sales were down 4% in Q4 2024, although this was a 120 basis points sequential improvement from the third quarter.
Challenging Commodity and Inflation Environment
Domestic company-owned restaurant segment margins declined due to higher food basket costs, particularly proteins and cheese, and lower average ticket prices.
Lower Adjusted Operating Income
Adjusted operating income for Q4 2024 was $37 million, down $10 million from the previous year due to lower operating margins and strategic investments.
Company Guidance
During the call, Papa John's provided guidance for 2025, forecasting system-wide sales growth between 2% and 5% compared to 2024, with North America comparable sales anticipated to be flat to up 2%. The company plans to invest up to $25 million in marketing, emphasizing CRM capabilities and the Papa Rewards loyalty program, which has already shown positive results with a 50% redemption rate for loyalty orders. The adjusted EBITDA is expected to range from $200 million to $220 million, down from $227 million in 2024, as the company focuses on long-term growth strategies. Despite challenges, the company aims to open between 85 and 115 new restaurants in North America and 180 to 200 internationally, with closures expected to normalize to historical levels.Papa John's International Corporate Events
Business Operations and StrategyFinancial Disclosures
Papa John’s Celebrates 6,000th Restaurant Amid Sales Challenges
Neutral
Jan 13, 2025
Papa John’s International announced its preliminary financial results for the fourth quarter and full year of 2024. Despite a decrease in North American comparable sales, the company achieved a significant milestone by opening its 6,000th restaurant, indicating strong brand confidence and growth potential. Global system-wide sales saw an approximate 8% decrease in the fourth quarter due to an extra operational week in 2023, while North American sales declined by 4%. International comparable sales rose by 2%, and the company added 122 net new restaurants during the quarter, highlighting its expansion efforts.
Business Operations and StrategyRegulatory Filings and Compliance
Papa John’s Investor Meeting and Presentation Disclosure
Neutral
Dec 12, 2024
Papa John’s International, Inc. is sharing a slide presentation with the investment community during a previously announced analyst and investor meeting scheduled for December 12, 2024. While the presentation is disclosed as part of a Current Report on Form 8-K, it is furnished under specific conditions and will not be integrated into other company filings unless explicitly stated. The announcement highlights the company’s strategic communication with stakeholders, indicating a focus on transparency and investor engagement, which may influence market perceptions and stakeholder confidence.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.