Yum! Brands (YUM) AI Stock Analysis

• Market Cap: $41.43B
• Dividend Yield: 1.82%
• Average Volume (3M): 2.29M
• Price to Earnings (P/E): 29.7
• Beta (1Y): 0.43
• Revenue Growth: 10.09%
• EPS Growth: -11.50%
• Country: US
• Employees: 40,000
• Sector: Consumer Cyclical
• Sector Strength: 74
• Industry: Restaurants
• EPS (TTM): 1.30
• Shares Outstanding: 277,964,500
• 10 Day Avg. Volume: 1,660,967
• 30 Day Avg. Volume: 2,293,487
• PEG Ratio: -10.66
• Price to Book (P/B): -5.74
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 30.25
• 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: $160.21
• Price Target Upside: 10.11% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 20

• Rating: 67 Neutral
• Price Target: $159.00 ▲( 9.28% Upside)

Yum! Brands' score reflects strong financial performance and positive earnings call sentiment, driven by growth at Taco Bell and KFC International and strategic AI initiatives. However, the stock's high leverage, negative equity, overvaluation, and mixed technical indicators pose risks.

Positive Factors

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

Market Performance

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

Pizza Hut Performance

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

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 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: 145.50
• 50DMA: Negative
• 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 Negative. The current price of 145.5 is below the 20-day moving average (MA) of 147.69, below the 50-day MA of 149.89, and above the 200-day MA of 139.39, indicating a neutral trend. The MACD of -0.42 indicates Negative momentum. The RSI at 44.14 is Neutral, neither overbought nor oversold. The STOCH value of 43.25 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	78 Outperform	$16.43B	18.43	15.73%	1.64%	2.79%	19.36%
CMG	77 Outperform	$69.35B	44.63	45.57%	―	12.57%	21.42%
DPZ	77 Outperform	$16.89B	28.27	-14.74%	1.30%	4.28%	13.76%
MCD	74 Outperform	$228.67B	28.21	-216.57%	2.17%	-0.22%	-3.83%
YUM	67 Neutral	$41.43B	29.71	-19.43%	1.82%	10.09%	-11.50%
SBUX	64 Neutral	$97.26B	31.11	-47.07%	2.84%	-0.50%	-24.28%
Sector *	62 Neutral	$6.97B	11.36	2.77%	3.91%	2.66%	-22.00%

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.

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.