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Papa John's International (PZZA)
NASDAQ:PZZA
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Papa John's International
(NASDAQ:PZZA)
60Neutral
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.
Innovation
Management is innovating with attractive price points and focusing on digital and loyalty improvements.
Valuation
The current valuation is seen as overly pessimistic regarding management's ability to reaccelerate growth over the medium- to longer-term.
Negative Factors
Competition
The upcoming launch of Domino's on the DoorDash platform could pose a negative same-store sales challenge for Papa John's.
Profitability
Commissary inefficiencies, coupled with price increases to improve the franchisors' margin, are challenging franchisees' profitability.
Sales Trends
The analysis of Placer AI traffic data shows continued pressure on near-term same-store sales trends for Papa John's.
Papa John's International (PZZA) vs. S&P 500 (SPY)
Market Cap
$1.17B
Dividend Yield5.16%
Average Volume (3M)1.22M
Price to Earnings (P/E)14.1
Beta (1Y)0.85
Revenue Growth-3.57%
EPS Growth2.31%
CountryUS
Employees11,400
SectorConsumer Cyclical
Sector Strength59
IndustryRestaurants
Share Statistics
EPS (TTM)0.63
Shares Outstanding32,709,300
10 Day Avg. Volume893,225
30 Day Avg. Volume1,220,305
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.93
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit3.88
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$52.50Price Target Upside47.10% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Papa John's International Business Overview & Revenue Model
Company DescriptionPapa John's International, Inc. operates and franchises pizza delivery and carryout restaurants under the Papa John's trademark in the United States and internationally. It operates through four segments: Domestic Company-Owned Restaurants, North America Commissaries, North America Franchising, and International Operations. The company also operates dine-in and delivery restaurants under the Papa John's trademark internationally. As of December 26, 2021, it operated 5,650 Papa John's restaurants, which included 600 company-owned and 5,050 franchised restaurants in 50 countries and territories. The company was founded in 1984 and is based in Louisville, Kentucky.
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 has demonstrated revenue growth and operational efficiency, with consistent revenue increases and a strong gross profit margin. However, the net profit margin decline in 2024 indicates cost pressures. The balance sheet shows negative equity and rising debt levels, posing financial risks. Cash flow management remains solid, but recent declines in free cash flow warrant attention. Overall, the company maintains a strong market position but faces financial stability challenges.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.―
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
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.―
| 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
Neutral
35.69
Price Trends
40.03
Negative
40.57
Negative
44.14
Negative
Market Momentum
-1.41
Negative
50.88
Neutral
95.02
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PZZA, the sentiment is Neutral. The current price of 35.69 is above the 20-day moving average (MA) of 32.98, below the 50-day MA of 40.03, and below the 200-day MA of 44.14, indicating a neutral trend. The MACD of -1.41 indicates Negative momentum. The RSI at 50.88 is Neutral, neither overbought nor oversold. The STOCH value of 95.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PZZA.
Papa John's International Risk Analysis
Papa John's International disclosed 36 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $11.41B | 26.55 | 34.69% | 1.46% | 16.01% | 42.54% | |
77 Outperform | $16.60B | 27.78 | -14.74% | 1.29% | 4.28% | 13.76% | |
70 Outperform | $6.62B | 64.13 | -16.09% | 0.38% | 30.98% | 112.65% | |
68 Neutral | $40.38B | 27.81 | -19.43% | 1.82% | 10.09% | -11.50% | |
66 Neutral | $2.46B | 13.28 | 68.30% | 7.97% | 2.98% | -2.58% | |
61 Neutral | $6.65B | 11.64 | 3.00% | 3.98% | 2.61% | -21.41% | |
60 Neutral | $1.17B | 14.06 | -20.16% | 5.16% | -3.57% | 2.31% |
* Consumer Cyclical Sector Average
Performance Comparison
PZZA
Papa John's International
35.69
-20.29
-36.25%
DPZ
Domino's Pizza
484.61
-30.55
-5.93%
TXRH
Texas Roadhouse
171.79
6.45
3.90%
WEN
Wendy's
12.55
-5.52
-30.55%
YUM
Yum! Brands
149.14
15.58
11.67%
WING
Wingstop
270.11
-124.42
-31.54%
Papa John's International Earnings Call Summary
Earnings Call Date:Feb 27, 2025
(Q4-2024)
| % Change Since: -22.82%|
Next Earnings Date:May 08, 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.Q4-2024 Updates
Positive Updates
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.
Negative Updates
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
Financial Disclosures
Papa John’s Updates Investor Presentation Post FY 2024 Earnings
Neutral
Mar 12, 2025
Papa John’s International, Inc. has released an updated Investor Presentation following its fiscal year 2024 earnings release. The presentation includes supplemental information for the interim periods and the full year ending December 29, 2024, which may impact stakeholders’ understanding of the company’s financial performance.
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.