Papa John's International (PZZA) AI Stock Analysis

• Market Cap: $1.34B
• Dividend Yield: 4.57%
• Average Volume (3M): 1.19M
• Price to Earnings (P/E): 36.0
• Beta (1Y): 1.04
• Revenue Growth: -0.64%
• EPS Growth: -60.71%
• Country: US
• Employees: 11,400
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 0.32
• Shares Outstanding: 32,789,417
• 10 Day Avg. Volume: 692,994
• 30 Day Avg. Volume: 1,190,829
• PEG Ratio: 6.52
• Price to Book (P/B): -3.05
• Price to Sales (P/S): 0.64
• P/FCF Ratio: 38.41
• Enterprise Value/Market Cap: 1.85
• Enterprise Value/Revenue: 1.19
• Enterprise Value/Gross Profit: 4.82
• Enterprise Value/Ebitda: 14.33
• 1Y Price Target: $49.14
• Price Target Upside: 22.18% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): 1.41
• Revenue Forecast (FY): $2.07B

• Rating: 57 Neutral
• Price Target: $43.00 ▲(6.91% Upside)

Papa John's overall stock score reflects a balance of strengths and challenges. The company's strong cash flow generation and strategic initiatives in refranchising and cost savings are positive, but they are offset by high financial leverage and declining profitability margins. The stock's technical indicators suggest a bearish trend, and the valuation appears stretched. However, the dividend yield offers some appeal to investors.

Positive Factors

International Sales Growth

Strong international sales growth indicates successful market expansion and diversification, reducing reliance on North American markets.

Cash Flow Generation

Robust cash flow generation enhances financial flexibility, allowing for reinvestment in growth initiatives and debt reduction.

Refranchising Strategy

Refranchising reduces operational risk and capital requirements, focusing resources on brand and product innovation.

Negative Factors

Declining Profitability Margins

Decreasing margins indicate operational inefficiencies and pricing pressures, which could impact long-term profitability.

High Financial Leverage

High leverage limits financial flexibility and increases risk, potentially affecting the company's ability to invest in growth.

North America Sales Decline

Declining North American sales suggest challenges in core markets, necessitating strategic adjustments to regain growth.

Papa John's International Business Overview & Revenue Model

Company Description

Papa John's International, Inc. is an American pizza restaurant chain headquartered in Louisville, Kentucky. Founded in 1984, it operates in the fast-food sector and is known for its high-quality pizza, which is made with fresh ingredients and a proprietary dough recipe. The company primarily offers a variety of pizzas, sides, desserts, and beverages through a franchise model, with a significant presence in both domestic and international markets. Papa John's is recognized for its commitment to quality and customer satisfaction, often utilizing innovative marketing strategies and promotional offers.

How the Company Makes Money

Papa John's generates revenue primarily through the sale of pizzas and related menu items in its company-operated and franchised restaurants. The company earns money through several key revenue streams: retail sales from restaurant operations, franchise fees, and royalties from franchised locations. Retail sales include dine-in, carryout, and delivery orders, which are bolstered by the company's loyalty programs and online ordering capabilities. Franchise fees provide an additional income source, as franchisees pay initial fees and ongoing royalties based on their sales. Significant partnerships with third-party delivery services also contribute to revenue growth, enhancing accessibility and customer convenience. Furthermore, strategic marketing promotions and a focus on menu innovation help to attract and retain customers, driving sales across various channels.

Papa John's International Financial Statement Overview

Summary

Papa John's International shows moderate financial performance with stable revenue growth and operational efficiency. However, declining profit margins and a highly leveraged balance sheet pose potential financial risks. Cash flow generation is improving, but the conversion of income to cash remains a concern.

Income Statement

Papa John's International shows moderate revenue growth with a TTM increase of 3.1%. However, the gross profit margin has decreased over time, from 30.8% in 2023 to 24.2% in TTM 2025, indicating rising costs or pricing pressures. The net profit margin has also slightly declined, reflecting challenges in maintaining profitability. Despite these challenges, the company maintains a stable EBIT and EBITDA margin, suggesting operational efficiency.

Balance Sheet

The balance sheet reveals significant financial leverage, with a negative equity position and a high debt-to-equity ratio of -2.24 in TTM 2025. This indicates potential financial risk. The return on equity is negative, reflecting losses on shareholder investments. The equity ratio is also negative, highlighting a reliance on debt financing, which could pose risks if interest rates rise or cash flows decline.

Cash Flow

Cash flow analysis shows a positive trend in free cash flow growth at 6.6% in TTM 2025, indicating improved cash generation. However, the operating cash flow to net income ratio is below 1, suggesting that net income is not fully translating into cash flow. The free cash flow to net income ratio is also moderate, indicating some efficiency in converting profits into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.09B	2.06B	2.14B	2.10B	2.07B	1.81B
Gross Profit	514.02M	580.96M	419.31M	388.43M	429.32M	344.20M
EBITDA	173.11M	226.11M	211.23M	161.06M	217.06M	142.09M
Net Income	38.26M	83.49M	82.10M	67.77M	120.02M	57.93M
Balance Sheet
Total Assets	884.10M	888.95M	875.00M	864.23M	885.70M	872.77M
Cash, Cash Equivalents and Short-Term Investments	38.97M	37.95M	40.59M	47.37M	70.61M	130.20M
Total Debt	950.16M	971.13M	965.72M	807.26M	685.50M	513.57M
Total Liabilities	1.31B	1.30B	1.32B	1.13B	1.05B	1.13B
Stockholders Equity	-439.31M	-429.53M	-459.09M	-286.39M	-187.67M	-282.18M
Cash Flow
Free Cash Flow	80.63M	34.15M	116.44M	39.42M	116.12M	150.79M
Operating Cash Flow	156.94M	106.63M	193.06M	117.81M	184.68M	186.44M
Investing Cash Flow	-62.41M	-17.35M	-75.12M	-62.79M	-63.51M	-41.07M
Financing Cash Flow	-73.30M	-91.67M	-124.08M	-76.24M	-180.53M	-43.46M

Papa John's International Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 40.22
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PZZA, the sentiment is Negative. The current price of 40.22 is below the 20-day moving average (MA) of 41.40, below the 50-day MA of 44.62, and below the 200-day MA of 43.60, indicating a bearish trend. The MACD of -0.76 indicates Negative momentum. The RSI at 39.75 is Neutral, neither overbought nor oversold. The STOCH value of 15.66 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PZZA.

Papa John's International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TXRH	72 Outperform	$11.63B	26.85	31.55%	1.57%	14.40%	12.45%
DPZ	68 Neutral	$14.58B	25.22	―	1.63%	3.92%	4.98%
WEN	65 Neutral	$1.60B	8.88	100.85%	8.08%	-0.21%	0.16%
WING	63 Neutral	$7.20B	42.31	―	0.45%	15.56%	79.02%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
YUM	59 Neutral	$42.69B	29.94	―	1.83%	11.60%	-4.33%
PZZA	57 Neutral	$1.34B	36.03	―	4.57%	-0.64%	-60.71%

Papa John's International Corporate Events

Papa John’s Refranchises 85 Restaurants to Pie Investments

On November 25, 2025, Papa John’s International announced the refranchising of 85 restaurants previously operated by Colonel’s Limited, LLC to Pie Investments, led by Chris Patel. This strategic move allows Pie Investments to expand its operations to over 150 restaurants, with plans to open 52 more by 2030, enhancing Papa John’s presence in the Northeast U.S. This transition marks a significant growth step for Pie Investments and aligns with Papa John’s strategy to empower franchisees and expand its market footprint.

Papa John’s Promotes Ravi Thanawala to CFO

On November 18, 2025, Papa John’s International announced the promotion of Ravi Thanawala to Chief Financial Officer and President, North America. Thanawala, who has been with the company since 2023, will now oversee North American restaurant operations and development strategies, in addition to his CFO duties. This move comes after his successful leadership in the company’s international segment, which saw four consecutive quarters of positive sales. Concurrently, Joe Sieve departed from his role as Chief Restaurant and Global Development Officer, effective November 17, 2025. His departure qualifies him for severance benefits under the company’s plans.