Yum! Brands (YUM) AI Stock Analysis

• Market Cap: $40.00B
• Dividend Yield: 1.98%
• Average Volume (3M): 1.84M
• Price to Earnings (P/E): 28.7
• Beta (1Y): 0.42
• Revenue Growth: 10.09%
• EPS Growth: -11.50%
• Country: US
• Employees: 40,000
• Sector: Consumer Cyclical
• Sector Strength: 57
• Industry: Restaurants
• EPS (TTM): 1.30
• Shares Outstanding: 277,964,500
• 10 Day Avg. Volume: 1,903,700
• 30 Day Avg. Volume: 1,844,566
• PEG Ratio: -2.19
• Price to Book (P/B): -4.13
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 31.91
• Enterprise Value/Market Cap: 1.20
• Enterprise Value/Revenue: 1.62
• Enterprise Value/Gross Profit: 11.88
• Enterprise Value/Ebitda: 4.50
• 1Y Price Target: $160.63
• Price Target Upside: 11.57% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 19

• Rating: 66 Neutral
• Price Target: $155.00 ▲(7.66%Upside)

Yum! Brands' strong revenue growth and operational efficiency are key strengths, supported by positive strategic initiatives like the NVIDIA partnership. However, high leverage and valuation concerns weigh on the stock. While the earnings call was positive, technical indicators suggest caution. Overall, the stock presents a mixed outlook with potential upside from strategic moves but risks from financial structure and valuation.

Positive Factors

Menu Innovation

Management plans to double the cadence of menu innovation in 2025 from every 4-5 weeks seen in 2024.

Same-Store Sales Performance

Taco Bell's stronger than expected performance with a 9% same-store sales increase highlights its positive contribution to YUM's results.

Technological Advancement

YUM's technological advancement with its internal SaaS division, Byte, shows potential for reducing costs and expanding services beyond its own brands.

Negative Factors

Pizza Hut Performance

Pizza Hut's performance was weaker than expected, which negatively impacted the overall earnings.

Share Price Decline

YUM shares have declined approximately 9% from their previous high, underperforming the broader market.

Unit Growth Challenges

Unit growth is lagging, pressured by closures, impacting the overall expansion strategy.

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 a combination of company-owned restaurant sales, franchise fees, and royalties. The company operates a significant portion of its restaurants through franchising, where franchisees pay an initial fee and ongoing royalties based on a percentage of their sales. This model allows Yum! Brands to expand its global presence with relatively low capital investment compared to owning all its outlets. In addition to royalties and franchise fees, the company benefits from sales at its company-operated restaurants. Strategic partnerships and marketing collaborations further enhance brand visibility and customer engagement, contributing to its revenue streams. The company also focuses on international markets for growth, leveraging its brands' adaptability to various cultural preferences and consumer trends.

Yum! Brands Financial Statement Overview

Summary

Yum! Brands shows strong revenue growth and operational efficiency, with a robust gross profit margin and healthy net profit margin. However, the company faces challenges with high leverage and negative stockholders' equity, which poses potential financial stability risks. Cash flow management is a strong point, providing a buffer against high debt levels.

Income Statement

Yum! Brands demonstrates strong revenue growth with a 9.4% increase in revenue in TTM compared to 2024. The gross profit margin is robust at 52.4%, and the net profit margin is healthy at 18.4%. However, net income has slightly declined when comparing TTM to the previous year, indicating some profitability pressures. The EBIT and EBITDA margins are strong, reflecting operational efficiency.

Balance Sheet

The balance sheet shows a concerning negative stockholders' equity, which indicates high leverage. The debt-to-equity ratio is not calculable due to negative equity, which is a significant risk factor. The equity ratio is also negative, reflecting substantial liabilities compared to assets, which poses potential financial stability risks.

Cash Flow

Cash flow analysis reveals a slight growth in free cash flow by 1.3% TTM. The operating cash flow to net income ratio is 1.21, indicating strong cash conversion from earnings. The free cash flow to net income ratio is also favorable at 1.02, showing good cash flow management despite declining net income.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
7.74B	7.55B	7.08B	6.84B	6.58B	5.65B
	Gross Profit
4.05B	3.58B	3.50B	3.31B	3.17B	2.69B
	EBIT
2.85B	2.40B	2.32B	2.19B	2.14B	1.50B
	EBITDA
2.94B	2.65B	2.48B	2.33B	2.38B	1.76B
	Net Income Common Stockholders
1.43B	1.49B	1.60B	1.32B	1.57B	904.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
607.00M	707.00M	512.00M	393.00M	486.00M	730.00M
	Total Assets
6.66B	6.73B	6.23B	5.85B	5.97B	5.85B
	Total Debt
11.36B	12.29B	12.03B	12.66B	12.13B	11.64B
	Net Debt
10.75B	11.67B	11.52B	12.29B	11.64B	10.91B
	Total Liabilities
14.46B	14.38B	14.09B	14.72B	14.34B	13.74B
	Stockholders Equity
-7.80B	-7.65B	-7.86B	-8.88B	-8.37B	-7.89B
Cash Flow		Free Cash Flow
1.45B	1.43B	1.32B	1.15B	1.48B	1.15B
	Operating Cash Flow
1.73B	1.69B	1.60B	1.43B	1.71B	1.30B
	Investing Cash Flow
-465.00M	-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: Negative
• Last Price: 143.97
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• 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 143.97 is below the 20-day moving average (MA) of 144.81, below the 50-day MA of 145.76, and above the 200-day MA of 139.38, indicating a neutral trend. The MACD of -0.84 indicates Negative momentum. The RSI at 46.26 is Neutral, neither overbought nor oversold. The STOCH value of 51.13 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
CMG	80 Outperform	$68.20B	45.51	45.57%	―	12.57%	21.42%
YUMC	78 Outperform	$16.77B	18.81	15.73%	2.14%	2.79%	19.36%
MCD	71 Outperform	$214.82B	26.50	-216.57%	2.35%	-0.22%	-3.83%
SBUX	67 Neutral	$103.90B	33.23	-47.07%	2.67%	-0.50%	-24.28%
YUM	66 Neutral	$40.00B	28.70	-19.43%	1.98%	10.09%	-11.50%
DPZ	66 Neutral	$15.30B	25.62	-14.74%	1.56%	4.28%	13.76%
Sector *	63 Neutral	$6.94B	11.34	2.80%	4.26%	2.68%	-24.70%

Yum! Brands Corporate Events

Yum! Brands Shareholders Approve 2025 Incentive Plan

On May 15, 2025, Yum! Brands, Inc. held its annual meeting of shareholders where several key proposals were voted on. The shareholders approved the 2025 Long Term Incentive Plan, the election of directors, and the appointment of KPMG LLP as the independent auditor for 2025. However, shareholder proposals on the use of antimicrobials in food-producing animals, faith-based employee resource groups, and workplace safety policies were not approved. These decisions reflect the company’s strategic focus and governance priorities, potentially impacting its operational policies and stakeholder engagement.

The most recent analyst rating on (YUM) stock is a Hold with a $140.00 price target. To see the full list of analyst forecasts on Yum! Brands stock, see the YUM Stock Forecast page.

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.