Education
About Us
Working with TipRanks
Follow Us
Papa John's International (PZZA)
NASDAQ:PZZA
Top Page
Papa John's International
(NASDAQ:PZZA)
Rating:60Neutral
Price Target:
$50.00
▲(8.93% Upside)
Positive Factors
Financial Performance
Papa John's reported solid operating results that beat consensus expectations on all metrics, showcasing strong financial performance.
Product Innovation
Product innovation momentum is building for Papa John's, with an initial focus around the core pizza menu offering.
Strategic Initiatives
Strategic initiatives and elevated reinvestment in the business are bearing fruit from both a same-store sales and brand messaging standpoint.
Negative Factors
Advertising Costs
Incremental advertising will be a ~$0.50 headwind to earnings in FY25, posing a challenge to profit margins.
Cash Flow Concerns
There are concerns with the direction of operating and free cash flow, indicating potential financial pressure.
Operational Concerns
There are concerns about basic operational gaps, high unit closure rates, and ongoing international restructuring.
Papa John's International (PZZA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.56B
Dividend Yield4.01%
Average Volume (3M)980.99K
Price to Earnings (P/E)21.0
Beta (1Y)0.85
Revenue Growth-1.46%
EPS Growth8.10%
CountryUS
Employees11,400
SectorConsumer Cyclical
Sector Strength77
IndustryRestaurants
Share Statistics
EPS (TTM)0.41
Shares Outstanding32,757,942
10 Day Avg. Volume1,181,306
30 Day Avg. Volume980,990
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.64
Enterprise Value/Revenue1.23
Enterprise Value/Gross Profit5.06
Enterprise Value/Ebitda11.87
Forecast
1Y Price Target
$50.50Price Target Upside10.02% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
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 generates revenue primarily through the sale of its pizza and related food products. The company operates a franchise model, where a significant portion of its revenue comes from franchise fees and royalties paid by franchisees based on their sales. Additionally, Papa John's earns income from company-owned restaurants, which contribute directly to its sales figures. The company also engages in online ordering and delivery services, which have become increasingly important revenue streams, especially with the rise of digital ordering platforms. Strategic partnerships with third-party delivery services further enhance its distribution capabilities and sales reach, effectively driving additional revenue. Seasonal promotions and limited-time offers also help boost sales during peak periods.
Papa John's International Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: 14.38%|
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook for Papa John's with significant improvements in North America and international sales, successful product innovations, and advancements in technology and customer engagement. Despite challenges such as increased labor and food costs, and a softer start to the third quarter in North America, the overall sentiment is optimistic due to strategic initiatives showing tangible results.Q2-2025 Updates
Positive Updates
North America Comparable Sales Growth
North America business returned to positive comparable sales, ending the quarter up 1%. This indicates a recovery and growth in the domestic market.
International Sales Improvement
Internationally, comparable sales increased by 4% with notable improvements in key markets like the U.K. and the Middle East.
Successful Product Innovations
Introduction of Cheddar Crust and Shaq-a-Roni pizza in North America, and Croissant Pizza in Dubai, boosted sales and customer engagement.
Advancements in Technology
Partnership with Google Cloud to enhance customer experience and operational efficiency, including AI-driven personalized offers and voice AI solutions.
Increased Loyalty Program Engagement
Additions of 2.7 million new accounts to Papa Rewards since November 2024, showing increased customer engagement and repeat purchases.
Negative Updates
Slight Decline in Ticket Comps
Second quarter ticket comps decreased by less than 0.5 percentage point, driven by changes to the loyalty program and product mix shift.
Challenges in Labor and Food Costs
Domestic Company-owned restaurant segment EBITDA margins declined approximately 220 basis points due to labor inflation, aggregator fees, and higher food costs.
Softer Start to Third Quarter in North America
North America comparable sales down approximately 1% in the first 5 weeks of the third quarter, attributed to a more cautious consumer and softer carryout business.
Store Closures in China
Closure of 41 underperforming restaurants in China as part of market optimization strategy, although this had minimal impact on systemwide sales.
Company Guidance
During the Papa John's Second Quarter 2025 Conference Call, the company provided optimistic guidance based on several key metrics and strategic initiatives. North America comparable sales increased by 1%, driven by a return to positive transaction growth, and international comparable sales rose by 4%. The company highlighted a $9 million investment in incremental marketing efforts, contributing to improved brand health and consumer engagement. Papa John's also discussed operational enhancements, such as oven calibration improvements, and the introduction of innovative menu items like the Cheddar Crust and Shaq-a-Roni pizza, which boosted pizza orders by 6% in Q2. Additionally, the company plans to realize over $50 million in supply chain cost savings by 2028, enhancing restaurant EBITDA margins. The refranchising strategy is expected to continue, with recent transactions indicating a focus on market optimization and growth. Overall, the company remains confident in its strategy to achieve sustainable and profitable growth.Papa John's International Financial Statement Overview
Summary
Papa John's financial health reflects moderate revenue growth but faces challenges with high leverage and negative equity, indicating financial risk. Cash flow shows some improvement, but strategic financial management is crucial to enhance profitability.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 | 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 | 505.20M | 580.96M | 657.07M | 390.54M | 429.32M | 344.20M |
| EBITDA | 215.29M | 226.11M | 212.50M | 161.06M | 217.06M | 137.02M |
| Net Income | 75.10M | 83.49M | 82.10M | 67.77M | 120.02M | 57.93M |
Balance Sheet | ||||||
| Total Assets | 890.44M | 888.95M | 875.00M | 864.23M | 885.70M | 872.77M |
| Cash, Cash Equivalents and Short-Term Investments | 33.30M | 37.95M | 40.59M | 47.37M | 70.61M | 130.20M |
| Total Debt | 966.66M | 971.13M | 965.72M | 807.26M | 685.50M | 513.57M |
| Total Liabilities | 1.31B | 1.30B | 1.32B | 1.13B | 1.05B | 1.14B |
| Stockholders Equity | -432.00M | -429.53M | -459.09M | -286.39M | -172.46M | -266.94M |
Cash Flow | ||||||
| Free Cash Flow | 57.88M | 34.15M | 116.44M | 39.42M | 116.12M | 150.79M |
| Operating Cash Flow | 131.52M | 106.63M | 193.06M | 117.81M | 184.68M | 186.44M |
| Investing Cash Flow | -12.90M | -17.35M | -75.12M | -62.79M | -63.51M | -41.07M |
| Financing Cash Flow | -110.00M | -91.67M | -124.08M | -76.24M | -180.53M | -43.46M |
Papa John's International Technical Analysis
Positive
45.90
Price Trends
46.05
Negative
41.71
Positive
42.72
Positive
Market Momentum
0.34
Negative
55.71
Neutral
82.17
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PZZA, the sentiment is Positive. The current price of 45.9 is above the 20-day moving average (MA) of 43.49, below the 50-day MA of 46.05, and above the 200-day MA of 42.72, indicating a neutral trend. The MACD of 0.34 indicates Negative momentum. The RSI at 55.71 is Neutral, neither overbought nor oversold. The STOCH value of 82.17 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $11.49B | 26.36 | 32.28% | 1.48% | 14.59% | 18.98% | |
70 Outperform | $9.41B | 56.29 | -16.09% | 0.34% | 22.74% | 87.07% | |
68 Neutral | $15.32B | 26.20 | -14.74% | 1.44% | 3.65% | 5.71% | |
68 Neutral | $41.13B | 29.27 | -19.43% | 1.82% | 11.30% | -7.82% | |
63 Neutral | £1.73B | 9.28 | 4.37% | 3.48% | 0.65% | -43.22% | |
60 Neutral | $1.56B | 20.97 | -20.16% | 4.01% | -1.46% | 8.10% | |
60 Neutral | $2.04B | 11.15 | 99.35% | 8.41% | 1.31% | -1.46% |
* Consumer Cyclical Sector Average
Performance Comparison
PZZA
Papa John's International
45.90
1.29
2.89%
DPZ
Domino's Pizza
450.56
29.82
7.09%
TXRH
Texas Roadhouse
175.91
11.55
7.03%
WEN
Wendy's
10.58
-5.46
-34.04%
YUM
Yum! Brands
152.01
17.69
13.17%
WING
Wingstop
330.92
-41.30
-11.10%
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.