Yum! Brands (YUM) AI Stock Analysis

• Market Cap: $41.48B
• Dividend Yield: 1.87%
• Average Volume (3M): 1.92M
• Price to Earnings (P/E): 29.5
• Beta (1Y): 0.39
• Revenue Growth: 11.30%
• EPS Growth: -7.82%
• Country: US
• Employees: 40,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 1.44
• Shares Outstanding: 277,535,700
• 10 Day Avg. Volume: 2,261,791
• 30 Day Avg. Volume: 1,919,346
• PEG Ratio: -3.62
• Price to Book (P/B): -4.95
• Price to Sales (P/S): 5.01
• P/FCF Ratio: 26.42
• Enterprise Value/Market Cap: 1.28
• Enterprise Value/Revenue: 6.72
• Enterprise Value/Gross Profit: 14.53
• Enterprise Value/Ebitda: 20.13
• 1Y Price Target: $160.40
• Price Target Upside: 6.64% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

• Rating: 66 Neutral
• Price Target: $161.00 ▲(7.04% Upside)

Yum! Brands' overall score reflects strong operational performance and digital growth, particularly with Taco Bell. However, financial risks due to high leverage and a premium valuation weigh on the score. The positive earnings call sentiment and strategic initiatives provide a supportive outlook.

Positive Factors

Digital Sales Growth

The growth in digital sales indicates a successful adaptation to consumer preferences for digital ordering, enhancing customer engagement and operational efficiency.

Franchise Model Strength

The franchise model provides a steady income stream with low operating costs, allowing for scalable growth and risk mitigation across diverse markets.

Taco Bell Performance

Taco Bell's robust growth highlights the brand's strong market position and effective marketing strategies, contributing significantly to overall company performance.

Negative Factors

High Leverage

The high leverage poses financial risks, potentially limiting flexibility and increasing vulnerability to economic downturns, impacting long-term sustainability.

KFC U.S. and Europe Challenges

Performance issues in key markets could hinder growth and require strategic adjustments to improve value perception and consumer experience.

Pizza Hut U.S. Transaction Softness

Transaction softness at Pizza Hut highlights challenges in competitive positioning, necessitating improved value messaging to drive customer engagement.

Yum! Brands Business Overview & Revenue Model

Company Description

YUM! Brands, Inc., together with its subsidiaries, develops, operates, and franchises quick service restaurants worldwide. It operates through four segments: the KFC Division, the Taco Bell Division, the Pizza Hut Division, and the Habit Burger Grill Division. The company operates restaurants under the KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill brands, which specialize in chicken, pizza, made-to-order chargrilled burgers, sandwiches, Mexican-style food categories, and other food products. As of December 31, 2021, it had 26,934 KFC units; 18,381 Pizza Hut units; 7,791 Taco Bell units; and 318 The Habit Burger Grill units in approximately 157 countries and territories. The company was formerly known as TRICON Global Restaurants, Inc. and changed its name to YUM! Brands, Inc. in May 2002. YUM! Brands, Inc. was incorporated in 1997 and is headquartered in Louisville, Kentucky.

How the Company Makes Money

Yum! Brands generates revenue primarily through its franchise model, which allows the company to earn royalties and fees from franchisees who operate its restaurants. This model provides a steady stream of income with relatively low operating costs. Additionally, Yum! Brands earns revenue from company-owned restaurants, where it retains a larger share of sales. The company also benefits from strategic partnerships and collaborations, such as those with delivery services and food aggregators, enhancing its reach and sales potential. Product innovation and menu diversification, including vegetarian and health-conscious options, contribute to increased customer traffic and sales, further bolstering revenue. Overall, Yum! Brands' revenue streams are significantly supported by its ability to adapt to changing consumer trends and preferences while maintaining a strong global presence.

Yum! Brands Financial Statement Overview

Summary

Yum! Brands shows strong revenue growth and operational efficiency, with healthy margins and cash flow metrics. However, the high leverage and negative equity position pose significant financial risks, impacting long-term sustainability.

Income Statement

Yum! Brands shows a consistent revenue growth trend with a TTM revenue growth rate of 2.20%. The gross profit margin has improved to 53.26% in the TTM, indicating strong cost management. However, the net profit margin has slightly decreased to 17.71% from 19.68% in the previous year, suggesting some pressure on net profitability. EBIT and EBITDA margins remain robust at 35.58% and 48.65%, respectively, reflecting operational efficiency.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of -1.46 in the TTM, indicating significant leverage and potential risk. The negative stockholders' equity is concerning, as it suggests financial instability. Return on equity is negative, at -18.59%, due to the negative equity, which is a red flag for investors. The equity ratio is also negative, emphasizing the company's reliance on debt financing.

Cash Flow

Yum! Brands has shown a positive free cash flow growth rate of 5.86% in the TTM, indicating improved cash generation. The operating cash flow to net income ratio is healthy at 1.41, suggesting strong cash conversion. The free cash flow to net income ratio is 0.84, which is solid, but there is room for improvement in converting net income to free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.91B	7.55B	7.08B	6.84B	6.58B	5.65B
Gross Profit	3.66B	3.58B	3.50B	3.31B	3.17B	2.69B
EBITDA	2.64B	2.56B	2.48B	2.33B	2.38B	1.71B
Net Income	1.43B	1.49B	1.60B	1.32B	1.57B	904.00M
Balance Sheet
Total Assets	6.92B	6.73B	6.23B	5.85B	5.97B	5.85B
Cash, Cash Equivalents and Short-Term Investments	677.00M	707.00M	512.00M	587.00M	486.00M	730.00M
Total Debt	11.39B	12.29B	12.03B	12.66B	12.13B	11.64B
Total Liabilities	14.60B	14.38B	14.09B	14.72B	14.34B	13.74B
Stockholders Equity	-7.68B	-7.65B	-7.86B	-8.88B	-8.37B	-7.89B
Cash Flow
Free Cash Flow	1.54B	1.43B	1.32B	1.15B	1.48B	1.15B
Operating Cash Flow	1.84B	1.69B	1.60B	1.43B	1.71B	1.30B
Investing Cash Flow	-299.00M	-422.00M	-107.00M	-202.00M	-173.00M	-335.00M
Financing Cash Flow	-1.36B	-1.16B	-1.43B	-1.32B	-1.77B	-738.00M

Yum! Brands Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 150.41
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For YUM, the sentiment is Positive. The current price of 150.41 is above the 20-day moving average (MA) of 146.83, above the 50-day MA of 145.88, and above the 200-day MA of 143.53, indicating a bullish trend. The MACD of 0.81 indicates Negative momentum. The RSI at 57.25 is Neutral, neither overbought nor oversold. The STOCH value of 80.05 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for YUM.

Yum! Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DRI	71 Outperform	21.76B	20.01	49.43%	3.05%	8.30%	7.69%
DPZ	71 Outperform	14.44B	24.69	-15.02%	1.59%	3.65%	5.71%
CMG	67 Neutral	53.03B	34.77	43.70%	―	8.57%	10.72%
YUM	66 Neutral	$41.48B	29.51	-19.43%	1.87%	11.30%	-7.82%
MCD	64 Neutral	217.17B	26.07	-304.06%	2.34%	1.17%	2.09%
SBUX	56 Neutral	95.79B	36.45	-34.25%	2.91%	0.60%	-35.19%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Yum! Brands Corporate Events

Yum! Brands Announces Key Leadership Appointments

On September 8, 2025, Yum! Brands announced key leadership appointments to bolster its global growth and strategic focus. Ranjith Roy was appointed as Chief Financial Officer, effective October 1, 2025, succeeding Chris Turner, who will become the CEO. Sean Tresvant was named Chief Consumer Officer and CEO of Taco Bell, while Jim Dausch was promoted to Chief Digital and Technology Officer and President of Byte by Yum!. These changes aim to enhance Yum!’s enterprise capabilities and drive long-term value creation across its iconic brands.

Yum! Brands Announces Plan to Refinance Notes

On September 3, 2025, Yum! Brands announced its plan to refinance its Series 2016-1 Class A-2-III Notes, part of its existing securitization financing facility linked to Taco Bell’s U.S. franchise royalties. The company aims to issue $1.0 billion in new senior term notes to repay the existing notes and cover transaction-related expenses, while other notes will remain outstanding. This move is expected to optimize Yum! Brands’ financial structure, although the timing and completion of the refinancing remain uncertain.

Yum! Brands Announces Leadership Changes and Governance Update

On August 22, 2025, Yum! Brands announced significant changes in its leadership and governance structure. David Gibbs resigned as a director effective October 1, 2025, and will be succeeded by Christopher Turner, who will also assume the role of Chief Executive Officer on the same date. Turner, who has been with the company since 2019, is expected to lead Yum! Brands into its next growth phase. Additionally, the company’s Board of Directors amended its bylaws to enhance governance, including the elimination of the Vice Chair position and the introduction of a Chief Legal Officer role. These changes are aimed at strengthening the company’s leadership and governance as it continues to expand its global presence.

Yum! Brands Appoints Christopher Turner as CEO

On June 13, 2025, Yum! Brands announced the appointment of Christopher Turner as the new Chief Executive Officer, effective October 1, 2025. Turner, who has been with the company since 2019, will succeed David Gibbs, who will transition to a non-executive advisory role. Turner has played a significant role in Yum! Brands’ digital transformation and growth strategies, and his leadership is expected to further accelerate the company’s momentum. The transition marks a new chapter for Yum! Brands, as it continues to focus on innovation and expanding its global presence.