Potbelly (PBPB) AI Stock Analysis

• Market Cap: $382.19M
• Dividend Yield: N/A
• Average Volume (3M): 243.37K
• Price to Earnings (P/E): 35.5
• Beta (1Y): 1.51
• Revenue Growth: -1.72%
• EPS Growth: -70.31%
• Country: US
• Employees: 5,000
• Sector: Consumer Cyclical
• Sector Strength: 83
• Industry: Restaurants
• EPS (TTM): 0.09
• Shares Outstanding: 30,260,672
• 10 Day Avg. Volume: 209,431
• 30 Day Avg. Volume: 243,366
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.34
• Enterprise Value/Revenue: 1.10
• Enterprise Value/Gross Profit: 3.51
• Enterprise Value/Ebitda: 20.83
• 1Y Price Target: $15.67
• Price Target Upside: 23.87% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 72 Outperform
• Price Target: $14.00 ▲(10.67% Upside)

Potbelly's strong financial recovery and positive earnings call are the most significant factors driving the score. The technical analysis supports a stable outlook, while the high P/E ratio suggests caution on valuation. Overall, the company is well-positioned for growth with some risks to monitor.

Positive Factors

Growth Strategy

Unit growth is expected to inflect beyond 10% with new franchised and company units opening in strategic markets.

Menu Innovation

New menu introductions, including the Prime Rib Steak sandwich, continue to drive incremental visits and brand trial for Potbelly.

Sales Performance

Potbelly's second-quarter same-store sales rose 3.2%, above guidance and consensus as trends progressively improved throughout the quarter.

Negative Factors

Cost Management

Higher-than-expected G&A costs were nearly $2 million above estimates.

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 generates revenue primarily through the sale of food and beverages at its retail locations. The company operates a franchise model, where a portion of its revenue comes from franchise fees and royalties. Key revenue streams include in-store sales, online orders, and catering services, allowing for a broad customer base that includes individuals, families, and corporate clients. Additionally, Potbelly has developed partnerships with delivery services to enhance its reach and convenience, contributing to its earnings. Seasonal promotions and limited-time menu offerings also play a significant role in driving sales and attracting customers.

Potbelly Financial Statement Overview

Summary

Potbelly shows strong financial recovery with improving profitability and cash flows. The income statement reflects healthy profitability with a net profit margin of 9.2%. The balance sheet indicates strengthening equity, though moderate leverage remains a risk. Cash flow performance is solid, with a significant free cash flow growth rate, though free cash flow relative to earnings is limited.

Income Statement

Potbelly has shown a positive trajectory in revenue and profitability. The TTM (Trailing-Twelve-Months) gross profit margin stands at 31.3% and the net profit margin at 9.2%, indicating healthy profitability. The revenue growth rate from 2024 to TTM is modest at 0.5%, reflecting stability. However, the slight decline in gross profit margin from 33.2% in 2024 suggests some cost pressures.

Balance Sheet

The company's balance sheet shows improvement in equity with a debt-to-equity ratio of 2.53 in TTM, down from 2.65 in 2024. Return on equity is strong at 73.1%, driven by improved profitability. However, the equity ratio of 22.1% indicates moderate leverage, posing potential risk in downturn scenarios.

Cash Flow

Potbelly's cash flow performance is solid with a free cash flow growth rate of 92.2% from 2024 to TTM. The operating cash flow to net income ratio of 0.64 suggests efficient cash generation relative to net income. Despite this, the free cash flow to net income ratio is 0.17, indicating limited free cash flow relative to earnings.

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	-6.58M	-51.30M
Net Income	43.00M	40.29M	5.12M	4.34M	-23.62M	-65.67M
Balance Sheet
Total Assets	265.76M	263.15M	252.46M	245.17M	253.24M	283.36M
Cash, Cash Equivalents and Short-Term Investments	14.76M	11.66M	33.79M	15.62M	14.35M	11.13M
Total Debt	148.64M	154.74M	186.99M	196.91M	214.69M	240.76M
Total Liabilities	207.40M	205.20M	238.37M	240.90M	255.65M	277.86M
Stockholders Equity	58.87M	58.39M	14.69M	4.48M	-2.32M	5.77M
Cash Flow
Free Cash Flow	7.29M	379.00K	2.44M	4.05M	-13.92M	-22.53M
Operating Cash Flow	27.60M	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: 12.65
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 12.65 is above the 20-day moving average (MA) of 12.63, above the 50-day MA of 12.46, and above the 200-day MA of 10.81, indicating a bullish trend. The MACD of 0.12 indicates Positive momentum. The RSI at 52.43 is Neutral, neither overbought nor oversold. The STOCH value of 42.61 is Neutral, 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	72 Outperform	$382.19M	35.53	19.65%	―	-1.72%	-70.31%
NATH	71 Outperform	$431.73M	18.30	-102.54%	1.90%	6.38%	9.98%
LOCO	66 Neutral	$311.65M	12.42	9.46%	―	1.85%	-0.99%
Sector *	61 Neutral	$17.97B	12.87	-5.29%	2.97%	1.26%	-14.45%
RRGB	55 Neutral	$111.40M	―	92.02%	―	-3.09%	-30.16%
GENK	46 Neutral	$103.74M	36.29	-5.04%	0.96%	10.67%	-181.88%
NDLS	41 Neutral	$32.04M	―	-978.37%	―	-1.23%	-68.38%

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.