Potbelly (PBPB) AI Stock Analysis

• Market Cap: $381.38M
• Dividend Yield: N/A
• Average Volume (3M): 238.90K
• Price to Earnings (P/E): 9.0
• Beta (1Y): 1.51
• Revenue Growth: -3.96%
• EPS Growth: 1036.87%
• Country: US
• Employees: 5,000
• Sector: Consumer Cyclical
• Sector Strength: 71
• Industry: Restaurants
• EPS (TTM): 0.00
• Shares Outstanding: 30,172,218
• 10 Day Avg. Volume: 258,625
• 30 Day Avg. Volume: 238,898
• PEG Ratio: 1.31
• Price to Book (P/B): 6.43
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 52.41
• Enterprise Value/Market Cap: 1.36
• Enterprise Value/Revenue: 0.28
• Enterprise Value/Gross Profit: 3.55
• Enterprise Value/Ebitda: 5.77
• 1Y Price Target: $15.50
• Price Target Upside: 22.63% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 75 Outperform
• Price Target: $14.50 ▲(14.72%Upside)

Potbelly's overall stock score reflects strong earnings call results and positive technical analysis, supported by solid financial performance despite moderate leverage. Valuation indicates potential upside, making Potbelly an attractive investment opportunity.

Positive Factors

Franchising Momentum

Potbelly added a record 40 units worth of franchisee commitments in the first quarter, demonstrating strong interest and brand momentum.

Growth Strategy

Management meetings reaffirm an accelerating growth story at Potbelly.

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

Market Competition

Despite strong unit economics, the need for continuous menu innovation highlights the competitive nature of the market Potbelly operates in.

Operational Challenges

Investments in digital infrastructure are necessary to maintain service speed, order accuracy, and lower labor costs, indicating operational 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 shows strong financial recovery with improving profitability and cash flows. The TTM gross profit margin is healthy at 31.3%, and net profit margin is 9.2%. However, a slight decline in gross profit margin suggests cost pressures. The balance sheet indicates moderate leverage with a debt-to-equity ratio of 2.53, but the equity ratio of 22.1% poses risk in downturns.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	462.60M	491.41M	451.97M	380.05M	291.28M
Gross Profit	153.66M	162.05M	126.19M	94.10M	47.00M
EBITDA	21.29M	21.90M	44.07M	-6.58M	-51.30M
Net Income	40.29M	5.12M	4.34M	-23.62M	-65.67M
Balance Sheet
Total Assets	263.15M	252.46M	245.17M	253.24M	283.36M
Cash, Cash Equivalents and Short-Term Investments	11.66M	33.79M	15.62M	14.35M	11.13M
Total Debt	154.74M	186.99M	196.91M	214.69M	240.76M
Total Liabilities	205.20M	238.37M	240.90M	255.65M	277.86M
Stockholders Equity	58.39M	14.69M	4.48M	-2.32M	5.77M
Cash Flow
Free Cash Flow	379.00K	2.44M	4.05M	-13.92M	-22.53M
Operating Cash Flow	19.66M	19.49M	12.48M	-4.87M	-11.61M
Investing Cash Flow	-19.08M	-10.77M	-8.43M	-9.05M	-10.92M
Financing Cash Flow	-22.64M	10.20M	-2.78M	17.15M	14.85M

Potbelly Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 12.64
• 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 12.64 is above the 20-day moving average (MA) of 12.56, above the 50-day MA of 11.48, and above the 200-day MA of 10.22, indicating a bullish trend. The MACD of 0.36 indicates Positive momentum. The RSI at 59.61 is Neutral, neither overbought nor oversold. The STOCH value of 61.10 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	75 Outperform	$381.38M	8.99	117.47%	―	-3.96%	1036.87%
LOCO	70 Outperform	$321.26M	12.57	9.68%	―	1.22%	6.59%
GENK	67 Neutral	$137.76M	36.29	-1.62%	0.71%	14.40%	-114.79%
NATH	64 Neutral	$398.28M	16.60	-102.54%	2.57%	6.91%	22.33%
Sector *	63 Neutral	$17.10B	10.79	-8.01%	2.94%	1.62%	-25.73%
RRGB	56 Neutral	$123.62M	―	92.02%	―	-1.68%	-140.83%
NDLS	40 Underperform	$47.78M	―	-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.