Potbelly (PBPB) AI Stock Analysis

• Market Cap: $385.30M
• Dividend Yield: N/A
• Average Volume (3M): 206.90K
• Price to Earnings (P/E): 9.1
• Beta (1Y): 1.50
• Revenue Growth: -3.96%
• EPS Growth: 1036.87%
• Country: US
• Employees: 5,000
• Sector: Consumer Cyclical
• Sector Strength: 60
• Industry: Restaurants
• EPS (TTM): 0.00
• Shares Outstanding: 30,172,218
• 10 Day Avg. Volume: 291,726
• 30 Day Avg. Volume: 206,903
• PEG Ratio: 1.17
• Price to Book (P/B): 5.73
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 93.27
• Enterprise Value/Market Cap: 1.23
• Enterprise Value/Revenue: 0.25
• Enterprise Value/Gross Profit: 3.26
• Enterprise Value/Ebitda: 5.29
• 1Y Price Target: $15.50
• Price Target Upside: 21.38% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 76 Outperform
• Price Target: $13.50 ▲(5.72%Upside)

Potbelly's strong financial recovery and positive technical indicators are the most significant factors driving the stock score. The attractive valuation further supports a favorable outlook. Although the earnings call reflected growth and innovation, minor challenges like the slight net loss and transaction decrease are noted.

Positive Factors

Growth and Expansion

Management meetings reaffirm an accelerating growth story at Potbelly, with unit growth expected to inflect beyond 10% with new franchised and company units opening in strategic markets.

Marketing and Innovation

Potbelly is expanding marketing tactics, including connected TV and influencer marketing, supported by growing systemwide revenues.

Menu Innovation

New menu introductions, such as the Prime Rib Steak sandwich, are driving incremental visits and brand trials, helping differentiate Potbelly from competitors.

Negative Factors

Operational Challenges

Despite strong unit economics and franchisee signings, the company faces challenges in maintaining favorable cash-on-cash paybacks and RLOM across different store levels.

Supply Chain and Costs

While Potbelly shows strong growth, maintaining a consistent ordering experience and managing labor costs with new digital infrastructure investments could pose challenges.

Potbelly Business Overview & Revenue Model

Company Description

Potbelly Corporation, through its subsidiaries, owns, operates, and franchises Potbelly sandwich shops. As of December 26, 2021, it had 443 shops in 33 states and the District of Columbia, which included 397 shops and 46 franchisees operated shops. The company was formerly known as Potbelly Sandwich Works, Inc. and changed its name to Potbelly Corporation in 2002. Potbelly Corporation was founded in 1977 and is headquartered in Chicago, Illinois.

How the Company Makes Money

Potbelly makes money primarily through the sale of food and beverages at its owned and franchised restaurant locations. The company's core revenue streams include direct sales from its menu offerings, which encompass sandwiches, salads, soups, and beverages to dine-in and take-out customers. Additionally, Potbelly generates revenue through its catering services, which cater to events and corporate functions. The company also earns revenue from franchise fees and royalties from franchise-operated locations. Significant factors contributing to Potbelly's earnings include its strategic location choices, menu innovation, and brand loyalty driven by its unique dining experience.

Potbelly Financial Statement Overview

Summary

Potbelly's financial performance shows a return to profitability with improved margins. However, challenges remain due to high leverage and limited cash flow. Continued focus on revenue growth and debt management is needed.

Income Statement

Potbelly's income statement shows a mixed performance. The company achieved a significant improvement in net profit margin, moving from a net loss in previous years to a positive net income in 2024. However, revenue has declined compared to 2023, indicating potential challenges in sales growth. The gross profit margin has improved sharply, suggesting better cost management. Despite these positive trends, the EBIT and EBITDA margins remain relatively low, indicating room for operational improvements.

Balance Sheet

The balance sheet reflects a strong increase in stockholders' equity, reflecting improved profitability. However, the debt-to-equity ratio remains high, suggesting significant leverage and potential financial risk. The equity ratio is low, but the improvement in equity levels is a positive sign. The company's asset base has remained relatively stable, but high liabilities continue to be a concern.

Cash Flow

Potbelly's cash flow statement indicates a stable operating cash flow, which supports its ongoing operations. Free cash flow remains positive but minimal, limiting the company's ability to invest heavily in growth opportunities or reduce debt quickly. The operating cash flow to net income ratio is positive, showing operational efficiency, but the free cash flow to net income ratio suggests limited cash generation relative to profit.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	465.13M	462.60M	491.41M	451.97M	380.05M	291.28M
Gross Profit	145.64M	153.66M	162.05M	126.19M	94.10M	47.00M
EBITDA	24.50M	21.29M	21.90M	44.07M	-1.45M	-37.29M
Net Income	43.00M	40.29M	5.12M	4.34M	-23.62M	-65.67M
Balance Sheet
Total Assets	227.46M	263.15M	252.46M	245.17M	253.24M	283.36M
Cash, Cash Equivalents and Short-Term Investments	12.72M	11.66M	33.79M	15.62M	14.35M	11.13M
Total Debt	164.23M	154.74M	186.99M	196.91M	214.69M	240.76M
Total Liabilities	213.80M	205.20M	238.37M	240.90M	255.65M	277.86M
Stockholders Equity	14.34M	58.39M	14.69M	4.27M	-2.42M	5.77M
Cash Flow
Free Cash Flow	3.65M	379.00K	2.44M	4.05M	-13.92M	-22.53M
Operating Cash Flow	18.97M	19.66M	19.49M	12.48M	-4.87M	-11.61M
Investing Cash Flow	-20.27M	-19.08M	-10.77M	-8.43M	-9.05M	-10.92M
Financing Cash Flow	-5.23M	-22.64M	10.20M	-2.78M	17.15M	14.85M

Potbelly Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 12.77
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PBPB, the sentiment is Positive. The current price of 12.77 is above the 20-day moving average (MA) of 11.55, above the 50-day MA of 10.37, and above the 200-day MA of 9.91, indicating a bullish trend. The MACD of 0.60 indicates Negative momentum. The RSI at 73.36 is Negative, neither overbought nor oversold. The STOCH value of 94.24 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PBPB.

Potbelly Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PBPB	76 Outperform	$385.30M	9.09	117.47%	―	-3.96%	1036.87%
LOCO	72 Outperform	$344.70M	13.49	9.68%	―	1.22%	6.59%
NATH	66 Neutral	$461.17M	19.22	-102.54%	1.83%	6.91%	22.33%
Sector *	62 Neutral	$16.85B	11.50	-7.38%	2.96%	1.59%	-23.36%
GENK	59 Neutral	$127.59M	36.29	-1.62%	0.78%	14.40%	-114.79%
RRGB	58 Neutral	$118.48M	―	92.02%	―	-1.68%	-140.83%
NDLS	49 Neutral	$36.75M	―	-978.37%	―	-0.61%	-200.32%

Potbelly Corporate Events

Potbelly Corporation Holds 2025 Annual Stockholders Meeting

On May 15, 2025, Potbelly Corporation held its 2025 Annual Meeting of Stockholders where key decisions were made, including the election of eight directors, ratification of KPMG LLP as the independent auditor for 2025, approval of executive compensation for 2024, and an amendment to increase shares in the Long-Term Incentive Plan. These decisions are expected to impact the company’s governance and financial strategies, potentially influencing its market position and stakeholder interests.

The most recent analyst rating on (PBPB) stock is a Buy with a $14.00 price target. To see the full list of analyst forecasts on Potbelly stock, see the PBPB Stock Forecast page.