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Papa John's International (PZZA)
NASDAQ:PZZA
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Papa John's International
(NASDAQ:PZZA)
Rating:56Neutral
Price Target:
$44.00
▲(4.27%Upside)
Positive Factors
Investment Interest
Shares of Papa John's rallied significantly after headlines indicated several investors were considering a bid for the company.
Market Share and Sales
Papa John's brand gained market share in the first quarter, showing sequential improvement in sales and transactions.
Negative Factors
Cash Flow Concerns
There are concerns with the direction of operating and free cash flow.
Competitive Challenges
Traffic trends for Domino's have improved more significantly than Papa John's, potentially due to new product offerings like stuffed crust pizza.
Same-Store Sales Trends
The analysis of Placer AI traffic data shows continued pressure on near-term same-store sales trends for Papa John's.
Papa John's International (PZZA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.41B
Dividend Yield4.36%
Average Volume (3M)999.44K
Price to Earnings (P/E)18.2
Beta (1Y)0.81
Revenue Growth-2.77%
EPS Growth4.01%
CountryUS
Employees11,400
SectorConsumer Cyclical
Sector Strength72
IndustryRestaurants
Share Statistics
EPS (TTM)0.36
Shares Outstanding32,738,434
10 Day Avg. Volume894,748
30 Day Avg. Volume999,436
Financial Highlights & Ratios
PEG Ratio-2.77
Price to Book (P/B)-3.34
Price to Sales (P/S)0.00
P/FCF Ratio26.50
Enterprise Value/Market Cap1.69
Enterprise Value/Revenue0.29
Enterprise Value/Gross Profit4.39
Enterprise Value/Ebitda2.59
Forecast
1Y Price Target
$49.14Price Target Upside16.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Papa John's International Business Overview & Revenue Model
Company DescriptionPapa John's International, Inc. operates and franchises pizza delivery and carryout restaurants under the Papa John's trademark in the United States and internationally. It operates through four segments: Domestic Company-Owned Restaurants, North America Commissaries, North America Franchising, and International Operations. The company also operates dine-in and delivery restaurants under the Papa John's trademark internationally. As of December 26, 2021, it operated 5,650 Papa John's restaurants, which included 600 company-owned and 5,050 franchised restaurants in 50 countries and territories. The company was founded in 1984 and is based in Louisville, Kentucky.
How the Company Makes MoneyPapa John's makes money primarily through the operation of company-owned restaurants and the franchising of its brand. Revenue streams include sales from company-operated restaurants, franchise royalties, and fees from franchised locations. Franchisees pay an initial franchise fee as well as ongoing royalties based on a percentage of their sales. Additionally, the company earns revenue from sales of food, equipment, and supplies to franchisees through its distribution network. Strategic partnerships, marketing initiatives, and a focus on digital and delivery services further enhance its earning potential, contributing to its overall revenue.
Papa John's International Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 28.19%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a company making strides in marketing, loyalty, and international growth, with promising technological partnerships. However, it also faces challenges in domestic sales and profitability, indicating a mixed performance.Q1-2025 Updates
Positive Updates
Sequential Improvement in Sales and Transactions
Papa John's experienced sequential improvement in sales and transaction comps compared to Q4 2024, with a 4% increase in the number of pizzas ordered versus last year.
Successful Marketing Campaigns
The 'Meet the Makers' marketing campaign improved value perception and increased customer awareness and consideration, contributing to significant gains in brand health.
Loyalty Program Expansion
The Papa Rewards loyalty program added approximately 1 million members in Q1, increasing total membership to over 37 million, with significant growth among medium and high-frequency consumers.
International Sales Growth
International comparable sales increased by 3% year-over-year in Q1, with strength across focus countries, including mid-single digit or double-digit growth in key markets.
Technology Enhancements
A partnership with Google Cloud aims to enhance ordering and delivery experiences and improve personalization, leveraging AI for better customer engagement.
Negative Updates
Decrease in North America Comparable Sales
North America comparable sales decreased by 2.7% in Q1 compared to the prior year, with transaction comps down less than 1%.
Lower Company-Owned Restaurant Revenues
Company-owned restaurant revenue decreased by $17 million in Q1, driven by closures and refranchising of restaurants in the U.K. and lower domestic sales.
Adjusted EBITDA Decline
Consolidated adjusted EBITDA decreased to $50 million from $61 million a year ago, primarily due to higher G&A expenses and investments in marketing and loyalty programs.
Pressure on Domestic Restaurant Margins
Domestic company-owned restaurant segment EBITDA margins declined by 550 basis points, with pressures from lower average ticket prices and higher food costs.
Company Guidance
In the first quarter of 2025, Papa John's provided robust guidance highlighting several key metrics and strategic initiatives aimed at driving growth. The company reported a global system-wide restaurant sales of $1.22 billion, a 1% increase in constant currency. North America comparable sales decreased by 2.7%, but showed a sequential improvement of 290 basis points since the previous quarter. Despite a decrease in ticket comps by 2%, primarily due to strategic adjustments in their loyalty program, international sales increased by 3%. Papa John's anticipates system-wide sales growth of 2% to 5% for 2025, with North America comparable sales expected to range from flat to up 2%. The first quarter saw the addition of approximately 1 million loyalty members, bringing the total to over 37 million. The company is investing significantly in marketing, with an additional $25 million planned for 2025 to enhance brand perception and customer engagement. Furthermore, Papa John's is leveraging a new partnership with Google Cloud to improve its technology infrastructure, enhancing customer personalization and delivery efficiency. The company aims to open 85 to 115 new restaurants in North America and 180 to 200 internationally, while also evaluating refranchising opportunities to optimize growth and profitability.Papa John's International Financial Statement Overview
Summary
Papa John's faces financial challenges with negative equity and high leverage, despite stable revenue growth. While cash flow shows some improvement, profitability and operational efficiency remain concerns.Income Statement
Papa John's shows stable revenue with modest growth over recent years, but profitability margins like Gross Profit and EBIT margins have seen some pressure. The TTM (Trailing-Twelve-Months) revenue growth is slight, and the Net Profit Margin has decreased, indicating challenges in maintaining cost efficiency.65
Positive
Balance Sheet
The company is highly leveraged with a negative stockholders' equity, resulting in a negative equity ratio. The Debt-to-Equity ratio is concerning, reflecting financial instability and potential risk. While total assets are increasing, liabilities outpace them, indicating financial strain.30
Negative
Cash Flow
Operating Cash Flow is positive, but Free Cash Flow growth is volatile. The TTM Free Cash Flow shows improvement, but the Free Cash Flow to Net Income ratio suggests limited cash conversion efficiency. Cash flow stability is a concern given the significant debt levels.55
Neutral
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.06B | 2.14B | 2.10B | 2.07B | 1.81B |
| Gross Profit | 580.96M | 657.07M | 390.54M | 429.32M | 344.20M |
| EBITDA | 226.11M | 212.50M | 161.06M | 217.06M | 137.02M |
| Net Income | 83.49M | 82.10M | 67.77M | 120.02M | 57.93M |
Balance Sheet | |||||
| Total Assets | 888.95M | 875.00M | 864.23M | 885.70M | 872.77M |
| Cash, Cash Equivalents and Short-Term Investments | 37.95M | 40.59M | 47.37M | 70.61M | 130.20M |
| Total Debt | 971.13M | 965.72M | 807.26M | 685.50M | 513.57M |
| Total Liabilities | 1.30B | 1.32B | 1.13B | 1.05B | 1.14B |
| Stockholders Equity | -429.53M | -459.09M | -286.39M | -172.46M | -266.94M |
Cash Flow | |||||
| Free Cash Flow | 34.15M | 116.44M | 39.42M | 116.12M | 150.79M |
| Operating Cash Flow | 106.63M | 193.06M | 117.81M | 184.68M | 186.44M |
| Investing Cash Flow | -17.35M | -75.12M | -62.79M | -63.51M | -41.07M |
| Financing Cash Flow | -91.67M | -124.08M | -76.24M | -180.53M | -43.46M |
Papa John's International Technical Analysis
Negative
42.20
Price Trends
46.44
Negative
42.23
Negative
43.57
Negative
Market Momentum
-1.04
Positive
34.28
Neutral
16.89
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 42.2 is below the 20-day moving average (MA) of 45.96, below the 50-day MA of 46.44, and below the 200-day MA of 43.57, indicating a bearish trend. The MACD of -1.04 indicates Positive momentum. The RSI at 34.28 is Neutral, neither overbought nor oversold. The STOCH value of 16.89 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 Risk Analysis
Papa John's International disclosed 36 risk factors in its most recent earnings report. Papa John's International reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Papa John's International Peers Comparison
Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $12.44B | 28.92 | 33.55% | 1.38% | 15.09% | 31.24% | |
74 Outperform | $16.10B | 27.54 | -14.74% | 1.38% | 3.65% | 5.71% | |
67 Neutral | ¥265.88B | 13.61 | 6.45% | 2.58% | 5.21% | -11.91% | |
67 Neutral | $40.11B | 28.77 | -19.43% | 1.90% | 10.09% | -11.50% | |
66 Neutral | $8.08B | 48.56 | -16.09% | 0.37% | 30.98% | 112.65% | |
65 Neutral | $1.99B | 11.06 | 90.40% | 8.74% | 2.18% | -5.15% | |
56 Neutral | $1.41B | 18.24 | -20.16% | 4.36% | -2.77% | 4.01% |
* Consumer Cyclical Sector Average
Performance Comparison
PZZA
Papa John's International
42.20
-0.15
-0.35%
DPZ
Domino's Pizza
470.05
47.70
11.29%
TXRH
Texas Roadhouse
184.58
12.45
7.23%
WEN
Wendy's
10.18
-5.81
-36.34%
YUM
Yum! Brands
145.18
14.90
11.44%
WING
Wingstop
290.30
-82.23
-22.07%
Papa John's International Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Papa John’s Appoints Chris Collins as SVP of Finance
Positive
Jul 2, 2025
On July 2, 2025, Papa John’s International appointed Chris Collins as the Senior Vice President of Corporate Finance and Principal Accounting Officer. Collins, who has been with the company since April 2021, brings over 30 years of finance experience, having previously worked with Signet Jewelers, The Goodyear Tire & Rubber Company, and American Axle & Manufacturing. This leadership change signifies a strategic move for Papa John’s, as Collins’ extensive experience is expected to enhance the company’s financial operations and positioning. Ravi Thanawala will continue his role as the principal financial officer.
The most recent analyst rating on (PZZA) stock is a Hold with a $42.00 price target. To see the full list of analyst forecasts on Papa John’s International stock, see the PZZA Stock Forecast page.
Executive/Board ChangesBusiness Operations and Strategy
Papa John’s Appoints New Chief Administrative Officer
Positive
Jun 5, 2025
On June 5, 2025, Papa John’s International announced the promotion of Caroline Miller Oyler to the newly created role of Chief Administrative Officer. In her expanded role, Ms. Oyler will oversee several departments, including human resources, legal, and risk, aiming to enhance efficiency and collaboration across teams. This strategic move is part of Papa John’s ongoing transformation for long-term growth, leveraging Ms. Oyler’s extensive experience and leadership within the company.
The most recent analyst rating on (PZZA) stock is a Hold with a $42.00 price target. To see the full list of analyst forecasts on Papa John’s International stock, see the PZZA Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.