Market RisksRisks include geographic concentration in Chicago, an intense competitive environment, ongoing pressure from wage inflation, and the margin impact associated with third-party delivery providers.
Stock RatingThe rating on PBPB shares is downgraded to Hold from Buy given the announced transaction.
Valuation ConcernsThe valuation is at a premium to what Potbelly has historically averaged, but it lags peers trading in the high-teens EV/EBITDA range.