Yum! Brands (YUM) AI Stock Analysis

• Market Cap: $41.26B
• Dividend Yield: 1.84%
• Average Volume (3M): 2.22M
• Price to Earnings (P/E): 28.4
• Beta (1Y): 0.50
• Revenue Growth: 6.68%
• EPS Growth: -7.09%
• Country: US
• Employees: 40,000
• Sector: Consumer Cyclical
• Sector Strength: 60
• Industry: Restaurants
• EPS (TTM): 5.22
• Shares Outstanding: 279,101,930
• 10 Day Avg. Volume: 2,348,146
• 30 Day Avg. Volume: 2,223,265
• PEG Ratio: 18.14
• Price to Book (P/B): N/A
• Price to Sales (P/S): 5.80
• Price to Cash Flow (P/CF): 21.30
• P/FCF Ratio: 17.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $158.89
• Price Target Upside: 9.63% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 19

Yum! Brands' overall score of 73 reflects a robust financial performance driven by revenue growth and effective cash flow management, supported by strong technical indicators. The company's strategic partnerships and technology initiatives enhance its growth prospects. However, high leverage and valuation concerns temper the overall outlook.

Positive Factors

Financial Performance

Yum appears well-positioned to execute against its long-term growth algorithm and its portfolio should be well-suited for a softer consumer spending environment.

Growth Strategy

Taco Bell's strengths are well understood, expected same-store sales growth shows resilience in a tough environment.

Innovation and Product Launch

Taco Bell's ability to outperform the quick-service restaurant category is driven by its cadence of new product launches.

Negative Factors

Competitive Risks

Global market competition remains highly intense, with rising contenders possibly scaling to reach fast food players scale faster than expected.

Domestic Challenges

Domestic challenges at other Yum! Brands persist, creating potential risks.

Expansion Challenges

The ambitious plan to nearly triple the international store base could face challenges, given previous hiccups in expansion.

Yum! Brands Business Overview & Revenue Model

Company Description

Yum! Brands, Inc. is a global leader in the quick-service restaurant industry, operating a diverse portfolio of fast-food brands that include KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill. With a presence in over 150 countries, Yum! Brands focuses on providing a variety of menu options that cater to different tastes and preferences, ranging from fried chicken and pizza to Mexican-inspired cuisine and chargrilled burgers. The company is committed to delivering a superior customer experience through its expansive network of franchise-operated restaurants.

How the Company Makes Money

Yum! Brands generates revenue primarily through franchise fees, royalties, and sales from company-owned restaurants. The majority of its restaurants are franchised, meaning franchisees pay initial fees and ongoing royalties based on a percentage of their sales to Yum! Brands. These franchise agreements provide a steady income stream with lower operational risk. Additionally, Yum! Brands earns revenue from the supply chain by selling food and paper products to franchisees. The company's strategic partnerships, marketing initiatives, and menu innovations further support its revenue growth. Key factors such as brand strength, global market presence, and scalability contribute significantly to Yum! Brands' earnings.

Yum! Brands Financial Statement Overview

Summary

Yum! Brands shows solid revenue growth and strong cash flow management. However, high leverage with negative equity poses financial risk, and net profit margin fluctuations require attention.

Income Statement

Yum! Brands shows a solid revenue growth trend over the past few years with a notable increase in total revenue from $5.65 billion in 2020 to $7.55 billion in 2024. Gross Profit Margin is consistently high as 100% due to the way cost is reported. EBIT and EBITDA margins are strong, indicating efficient operations. However, Net Profit Margin has seen some fluctuations. Overall, revenue growth and profitability are positive, but the net income dip in 2024 requires attention.

Balance Sheet

The company operates with negative stockholder equity, indicating a high leverage situation due to substantial total debt exceeding total assets. Debt-to-equity ratio is not calculable due to negative equity, which poses financial risk. Despite this, the company has managed a stable asset base over the years. The balance sheet reflects potential financial vulnerability and high leverage, which are key risk factors.

Cash Flow

Operating cash flow is robust and growing, with an increase from $1.31 billion in 2019 to $1.69 billion in 2024, supporting strong free cash flow. The Free Cash Flow to Net Income Ratio is favorable, indicating effective cash management. However, fluctuations in net income and capital expenditures could impact long-term cash stability. Overall, cash flow management remains a strong suit.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
7.55B	7.08B	6.84B	6.58B	5.65B
	Gross Profit
3.58B	3.50B	3.31B	3.17B	2.69B
	EBIT
2.40B	2.32B	2.19B	2.14B	1.50B
	EBITDA
2.56B	2.48B	2.40B	2.41B	1.76B
	Net Income Common Stockholders
1.49B	1.60B	1.32B	1.57B	904.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
707.00M	512.00M	367.00M	486.00M	730.00M
	Total Assets
6.73B	6.23B	5.85B	5.97B	5.85B
	Total Debt
12.29B	12.03B	11.85B	11.25B	10.72B
	Net Debt
11.67B	11.52B	11.48B	10.76B	9.99B
	Total Liabilities
14.38B	14.09B	14.72B	14.34B	13.74B
	Stockholders Equity
-7.65B	-7.86B	-8.88B	-8.37B	-7.89B
Cash Flow		Free Cash Flow
1.69B	1.32B	1.15B	1.48B	1.15B
	Operating Cash Flow
1.69B	1.60B	1.43B	1.71B	1.30B
	Investing Cash Flow
-422.00M	-107.00M	-202.00M	-173.00M	-335.00M
	Financing Cash Flow
-1.16B	-1.43B	-1.32B	-1.77B	-738.00M

Yum! Brands Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 144.93
• 50DMA: Negative
• 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 YUM, the sentiment is Negative. The current price of 144.93 is below the 20-day moving average (MA) of 155.93, below the 50-day MA of 149.85, and above the 200-day MA of 136.51, indicating a neutral trend. The MACD of 2.31 indicates Positive momentum. The RSI at 61.21 is Neutral, neither overbought nor oversold. The STOCH value of 63.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for YUM.

Yum! Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YUMC	80 Outperform	$17.97B	20.51	15.02%	1.50%	2.96%	17.75%
CMG	77 Outperform	$64.09B	42.45	45.67%	―	14.61%	25.68%
MCD	76 Outperform	$214.42B	26.35	-216.57%	2.29%	1.67%	-1.61%
YUM	73 Outperform	$41.26B	28.35	-19.43%	1.84%	6.68%	-7.09%
DPZ	68 Neutral	$15.24B	26.61	-14.74%	1.41%	5.07%	13.74%
SBUX	62 Neutral	$93.26B	26.53	-47.07%	2.87%	-1.48%	-17.32%
Sector *	59 Neutral	$11.18B	10.04	-1.58%	3.96%	1.31%	-16.97%

Yum! Brands Corporate Events

Yum! Brands Partners with NVIDIA for AI Innovation

On March 18, 2025, Yum! Brands announced a partnership with NVIDIA to develop AI technologies for its global restaurant operations. This collaboration aims to integrate AI into Yum!’s Byte by Yum! platform, enhancing customer and team member experiences through voice AI agents, computer vision, and AI-driven analytics. The partnership signifies a major step in AI innovation within the restaurant industry, with plans to roll out these technologies in 500 restaurants across its brands. This strategic move is expected to optimize operations, improve customer engagement, and strengthen Yum! Brands’ leadership in restaurant technology.

Yum! Brands Unveils Strategic Vision for Taco Bell

On March 4, 2025, Yum! Brands hosted Taco Bell Consumer Day, unveiling a strategic vision for Taco Bell’s future, including plans for innovation and global brand experience enhancement. Taco Bell aims for significant growth with targets of 8% U.S. same-store sales growth for Q1 2025 and ambitious goals for 2030, such as increasing annual unit volumes and expanding its international presence to 3,000 stores, highlighting its commitment to innovation and expansion.