Restaurant Brands International (QSR) AI Stock Analysis

• Market Cap: $40.72B
• Dividend Yield: 3.8%
• Average Volume (3M): 1.17M
• Price to Earnings (P/E): 22.0
• Beta (1Y): 0.51
• Revenue Growth: 26.22%
• EPS Growth: -22.75%
• Country: CA
• Employees: 37,600
• Sector: Consumer Cyclical
• Sector Strength: 59
• Industry: Restaurants
• EPS (TTM): 1.04
• Shares Outstanding: 327,643,300
• 10 Day Avg. Volume: 2,553,860
• 30 Day Avg. Volume: 1,169,627
• PEG Ratio: 0.96
• Price to Book (P/B): 11.76
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 21.15
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 1.28
• Enterprise Value/Gross Profit: 13.71
• Enterprise Value/Ebitda: 4.10
• 1Y Price Target: $106.59
• Price Target Upside: 19.00% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 20

• Rating: 77 Outperform
• Price Target: C$112.00 ▲(25.04%Upside)

Restaurant Brands International's strong financial performance and international growth are key strengths. The company maintains operational efficiency despite high leverage. Mixed results from the earnings call highlight challenges in the U.S. market and strategic transitions. The stock's valuation is fair, with an attractive dividend yield, but technical indicators suggest limited bullish momentum.

Positive Factors

Company Performance

Management expressed confidence in Tim's Canada and U.S. development, and stabilizing Burger King U.S. net restaurant counts.

Growth Prospects

Bulls believe risks to the story are priced in, and so long as 8% AOI growth is achieved than shares are attractive on a total return basis.

Management Strategy

Management believes April's improved performance at Tim's is sustainable, aided by continued progress with the Back to Basics playbook, including new menu innovation and marketing campaigns.

Negative Factors

Competitive Pressure

There is a lack of confidence in Burger King's ability to compete with peers' menu innovations while the company seeks to fill the vacant CMO role.

Consumer Perception

Proprietary survey data suggests deteriorating value perceptions for BK compared to peers, indicating potential challenges in 2025.

Market Valuation

Analyst downgrades QSR as shares are seen as fairly valued following a recent stock bounce.

Restaurant Brands International Business Overview & Revenue Model

Company Description

Restaurant Brands International Inc. operates as quick service restaurant company in Canada and internationally. It operates through four segments: Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK), and Firehouse Subs (FHS). The company owns and franchises TH chain of donut/coffee/tea restaurants that offer blend coffee, tea, and espresso-based hot and cold specialty drinks; and fresh baked goods, including donuts, Timbits, bagels, muffins, cookies and pastries, grilled paninis, classic sandwiches, wraps, soups, and others. It is also involved in owning and franchising BK, a fast food hamburger restaurant chain, which offers flame-grilled hamburgers, chicken and other specialty sandwiches, french fries, soft drinks, and other food items; and PLK quick service restaurants that provide Louisiana style fried chicken, chicken tenders, fried shrimp and other seafood, red beans and rice, and other regional items. In addition, the company owns and franchises FHS restaurants quick service restaurants that offer subs, soft drinks, and local specialties. As of February 15, 2022, the company had approximately 29,000 restaurants in 100 countries under the Tim Hortons, Burger King, Popeyes, And Firehouse Subs brands. Restaurant Brands International Inc. was founded in 1954 and is headquartered in Toronto, Canada.

How the Company Makes Money

Restaurant Brands International makes money primarily through its franchising model. The company generates revenue from franchise fees, royalties based on a percentage of sales, and sales of supplies to franchisees. Additionally, RBI owns and operates a number of restaurants from which it directly earns sales revenue. The company also benefits from strategic partnerships and marketing initiatives that enhance brand visibility and customer engagement. Significant factors contributing to its earnings include menu innovation, global expansion, and cost management strategies to improve operational efficiency.

Restaurant Brands International Financial Statement Overview

Summary

Restaurant Brands International demonstrates strong revenue growth and operational efficiency, as reflected in its income statement. Despite high leverage, the firm maintains a solid return on equity and effective cash conversion, but profitability pressures and a high debt load pose potential risks. Overall, the company is navigating growth effectively but should monitor debt levels to mitigate financial risks.

Income Statement

The income statement shows strong revenue growth with a 25.0% increase from 2023 to TTM, and a solid gross profit margin of 34.5% in TTM. There is a notable net profit margin of 10.8% despite a decrease in net income. The EBIT and EBITDA margins at 26.3% and 29.3% respectively highlight operational efficiency. However, the decline in net income from previous periods indicates some profitability pressure.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio of 5.11 in TTM, indicating significant leverage which could pose risks. The return on equity remains strong at 30.5% in TTM, showing effective use of equity, and the equity ratio of 12.5% suggests a relatively low equity buffer against liabilities.

Cash Flow

Cash flow performance is robust with a free cash flow to net income ratio of 1.30 in TTM, indicating strong cash conversion. Operating cash flow to net income ratio stands at 1.55, underscoring efficient cash generation from operations. However, the free cash flow growth rate shows a slight decline, reflecting challenges in maintaining free cash flow amid changing net income levels.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.78B	8.41B	7.02B	6.50B	5.74B	4.97B
Gross Profit	3.03B	3.02B	2.80B	2.60B	2.40B	2.83B
EBITDA	2.57B	2.66B	2.24B	2.21B	2.13B	1.78B
Net Income	950.00M	1.02B	1.19B	1.48B	1.25B	750.00M
Balance Sheet
Total Assets	23.39B	24.63B	23.39B	22.75B	23.25B	22.78B
Cash, Cash Equivalents and Short-Term Investments	1.14B	1.33B	1.14B	1.18B	1.09B	1.56B
Total Debt	14.52B	15.96B	14.52B	14.30B	14.41B	13.90B
Total Liabilities	18.66B	19.79B	18.66B	18.48B	19.39B	19.06B
Stockholders Equity	2.87B	3.11B	2.87B	2.50B	2.24B	2.17B
Cash Flow
Free Cash Flow	1.23B	1.30B	1.20B	1.39B	1.62B	804.00M
Operating Cash Flow	1.47B	1.50B	1.32B	1.49B	1.73B	921.00M
Investing Cash Flow	-813.00M	-660.00M	11.00M	-64.00M	-1.10B	-79.00M
Financing Cash Flow	-687.00M	-625.00M	-1.37B	-1.31B	-1.09B	-821.00M

Restaurant Brands International Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 89.57
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:QSR, the sentiment is Negative. The current price of 89.57 is below the 20-day moving average (MA) of 92.25, below the 50-day MA of 92.34, and below the 200-day MA of 92.31, indicating a bearish trend. The MACD of -1.34 indicates Positive momentum. The RSI at 37.04 is Neutral, neither overbought nor oversold. The STOCH value of 24.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:QSR.

Restaurant Brands International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QSR	77 Outperform	$40.72B	21.97	31.29%	3.80%	26.22%	-22.75%
Sector *	66 Neutral	€9.18B	14.50	5.85%	3.10%	3.86%	-31.71%
PZRIF		$364.42M	16.30	10.29%	6.15%	―	―
QSP.UN	73 Outperform	C$40.69B	21.86	27.52%	3.79%	21.63%	-9.39%
ODD	38 Underperform	C$17.23M	―		―	-6.91%	31.42%
MTYFF		$687.58M	126.68	1.11%	3.24%	―	―

Restaurant Brands International Corporate Events

Restaurant Brands International Reports Q1 2025 Results with Strategic Growth Plans

Restaurant Brands International reported a 2.8% growth in system-wide sales for the first quarter of 2025, with notable international sales growth of 8.6%. Despite a slower start to the year, the company is optimistic about achieving at least 8% organic adjusted operating income growth in 2025, supported by strong franchisee alignment and responsible cost management. The recent acquisitions of Carrols Restaurant Group and Popeyes China have led to the establishment of a new operating segment, Restaurant Holdings, which includes results from these acquisitions and aims to enhance RBI’s long-term business management.