Yum! Brands (YUM) AI Stock Analysis

• Market Cap: $42.69B
• Dividend Yield: 1.85%
• Average Volume (3M): 2.14M
• Price to Earnings (P/E): 29.9
• Beta (1Y): 0.30
• Revenue Growth: 11.60%
• EPS Growth: -4.33%
• Country: US
• Employees: 40,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 1.58
• Shares Outstanding: 277,652,830
• 10 Day Avg. Volume: 2,336,615
• 30 Day Avg. Volume: 2,139,618
• 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: 1.24
• Enterprise Value/Revenue: 6.55
• Enterprise Value/Gross Profit: 14.18
• Enterprise Value/Ebitda: 19.62
• 1Y Price Target: $163.44
• Price Target Upside: 6.30% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 20
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 59 Neutral
• Price Target: $151.00 ▼(-1.79% Downside)

Yum! Brands' overall stock score is driven by strong cash flow management and operational efficiency, but is offset by high leverage and financial risks. The technical analysis indicates a bearish trend, while the valuation suggests the stock may be overvalued. Positive earnings call highlights and corporate events provide some optimism for future growth.

Positive Factors

Digital Sales Growth

Strong digital sales growth indicates effective adaptation to consumer trends, enhancing customer engagement and operational efficiency.

Strategic Acquisitions

Acquiring additional Taco Bell locations strengthens market presence and is expected to boost profitability, supporting long-term growth.

Leadership Appointments

New leadership appointments aim to drive strategic focus and global growth, enhancing enterprise capabilities and long-term value creation.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, potentially impacting the company's ability to invest in growth opportunities.

Pizza Hut Challenges

Operational challenges at Pizza Hut could hinder overall brand performance, requiring strategic adjustments to improve execution and growth.

Profitability Margins

Declining profitability margins suggest pressure on cost management, which may affect long-term financial health and investment capacity.

Yum! Brands Business Overview & Revenue Model

Company Description

Yum! Brands, Inc. is a global leader in the restaurant industry, operating a diverse portfolio of well-known brands including Taco Bell, KFC, Pizza Hut, and Wingstreet. Headquartered in Louisville, Kentucky, the company focuses on quick-service restaurants (QSR) and casual dining, serving millions of customers daily across multiple countries. Yum! Brands is committed to innovation in its menu offerings and enhancing customer experience, while promoting sustainable practices in its operations.

How the Company Makes Money

Yum! Brands generates revenue primarily through franchising its restaurant brands and company-operated restaurants. The company's revenue model includes franchise fees, which are collected from franchisees as a percentage of their sales, along with initial franchise setup fees. Additionally, Yum! Brands earns revenue from company-operated locations by selling food and beverages directly to customers. Key revenue streams are bolstered through strategic partnerships with suppliers and technology companies to enhance delivery and digital ordering platforms. The company also benefits from economies of scale and brand recognition, which drive customer loyalty and repeat business across its various brands.

Yum! Brands Financial Statement Overview

Summary

Yum! Brands shows strong cash flow management and operational efficiency, but faces challenges with profitability margins and high leverage. The negative equity position and high debt levels pose financial risks, while stable revenue growth and strong cash flow provide a solid foundation for future improvements.

Income Statement

Yum! Brands has shown stable revenue with a TTM revenue of $7.91 billion, maintaining a consistent revenue growth rate over the years. However, the gross profit margin has slightly decreased from 49.4% in 2023 to 45.9% in TTM, indicating some pressure on cost management. The net profit margin has also declined from 22.6% in 2023 to 17.3% in TTM, reflecting reduced profitability. EBIT and EBITDA margins remain strong, showcasing operational efficiency.

Balance Sheet

The company has a high debt-to-equity ratio of -1.60 in TTM, indicating significant leverage and potential financial risk. The negative stockholders' equity suggests financial instability, and the return on equity is negative, highlighting challenges in generating returns for shareholders. The equity ratio is concerning, with equity being negative compared to total assets.

Cash Flow

Yum! Brands has demonstrated strong cash flow management with a significant free cash flow growth rate of 195.3% in TTM. The operating cash flow to net income ratio is healthy at 0.82, and the free cash flow to net income ratio is robust at 0.84, indicating efficient cash conversion and liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.06B	7.55B	7.08B	6.84B	6.58B	5.65B
Gross Profit	3.72B	3.58B	3.50B	3.31B	3.17B	2.69B
EBITDA	2.69B	2.56B	2.48B	2.33B	2.38B	1.71B
Net Income	1.45B	1.49B	1.60B	1.32B	1.57B	904.00M
Balance Sheet
Total Assets	7.19B	6.73B	6.23B	5.85B	5.97B	5.85B
Cash, Cash Equivalents and Short-Term Investments	1.04B	707.00M	512.00M	587.00M	486.00M	730.00M
Total Debt	11.55B	12.29B	12.03B	12.66B	12.13B	11.64B
Total Liabilities	14.70B	14.38B	14.09B	14.72B	14.34B	13.74B
Stockholders Equity	-7.50B	-7.65B	-7.86B	-8.88B	-8.37B	-7.89B
Cash Flow
Free Cash Flow	1.57B	1.43B	1.32B	1.15B	1.48B	1.15B
Operating Cash Flow	1.91B	1.69B	1.60B	1.43B	1.71B	1.30B
Investing Cash Flow	-338.00M	-422.00M	-107.00M	-202.00M	-173.00M	-335.00M
Financing Cash Flow	-994.00M	-1.16B	-1.43B	-1.32B	-1.77B	-738.00M

Yum! Brands Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 153.75
• 50DMA: Positive
• 100DMA: Positive
• 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 Positive. The current price of 153.75 is above the 20-day moving average (MA) of 149.67, above the 50-day MA of 146.86, and above the 200-day MA of 146.47, indicating a bullish trend. The MACD of 1.49 indicates Negative momentum. The RSI at 59.41 is Neutral, neither overbought nor oversold. The STOCH value of 75.38 is Neutral, 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	76 Outperform	$22.08B	19.90	54.10%	3.06%	8.61%	9.39%
CMG	73 Outperform	$49.77B	33.17	44.96%	―	7.31%	5.26%
DPZ	68 Neutral	$14.58B	25.22	―	1.61%	3.92%	4.98%
MCD	65 Neutral	$224.93B	26.94	―	2.27%	1.26%	2.87%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
YUM	59 Neutral	$42.69B	29.94	―	1.85%	11.60%	-4.33%
SBUX	56 Neutral	$100.44B	54.23	―	2.88%	2.80%	-50.71%

Yum! Brands Corporate Events

Yum! Brands Updates Bylaws to Enhance Governance

On November 21, 2025, Yum! Brands, Inc. announced amendments to its Amended and Restated Bylaws, which include changes to shareholder meeting procedures and director nomination processes. These amendments aim to streamline shareholder interactions and enhance governance, potentially impacting the company’s operational efficiency and stakeholder engagement.

Yum! Brands Announces Strategic Review for Pizza Hut

On November 4, 2025, Yum! Brands announced a strategic review of options for the Pizza Hut brand, aiming to maximize long-term value. The company reported a 15% year-over-year increase in third-quarter EPS excluding special items, with Taco Bell and KFC showing significant sales and unit growth. Yum! Brands also plans to acquire 128 Taco Bell restaurants in the Southeast U.S. to enhance its equity-owned restaurant base. New leadership appointments were made, and the company highlighted its digital sales achievements, indicating a strong market position and future growth potential.

Yum! Brands Completes $1.5 Billion Refinancing Deal

On September 24, 2025, Taco Bell Funding, LLC, a subsidiary of Taco Bell Corp., completed a refinancing transaction by issuing $1.5 billion in senior secured notes. This move aims to repay existing debt and support corporate activities, potentially enhancing Taco Bell’s financial flexibility and operational capabilities. The notes are secured by Taco Bell’s U.S. franchise agreements and intellectual property, with specific covenants and restrictions in place to ensure financial stability.

Yum! Brands Announces $1.5 Billion Notes Sale

On September 9, 2025, YUM! Brands, Inc. announced a purchase agreement through its subsidiary, Taco Bell Funding, LLC, to issue and sell $1.5 billion in senior secured notes. The proceeds from these notes will be used to repay existing debt, cover transaction-related expenses, and potentially return capital to shareholders, with the sale expected to close on September 24, 2025.

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.