Yum! Brands (YUM) AI Stock Analysis

• Market Cap: $39.44B
• Dividend Yield: 1.88%
• Average Volume (3M): 1.89M
• Price to Earnings (P/E): 28.1
• Beta (1Y): 0.40
• Revenue Growth: 11.30%
• EPS Growth: -7.82%
• Country: US
• Employees: 40,000
• Sector: Consumer Cyclical
• Sector Strength: 75
• Industry: Restaurants
• EPS (TTM): 1.44
• Shares Outstanding: 277,535,700
• 10 Day Avg. Volume: 2,516,718
• 30 Day Avg. Volume: 1,890,363
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.35
• Enterprise Value/Revenue: 6.72
• Enterprise Value/Gross Profit: 13.00
• Enterprise Value/Ebitda: 18.28
• 1Y Price Target: $161.13
• Price Target Upside: 9.78% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17

• Rating: 66 Neutral
• Price Target: $156.00 ▲(6.29% Upside)

Yum! Brands' overall score is driven by strong digital sales growth and strategic initiatives in AI and technology, which are expected to bolster future performance. However, financial risks due to high leverage and negative equity, along with a relatively high valuation, temper the outlook.

Positive Factors

Franchise and Scale

Yum! Brands' size and scale are a clear competitive advantage, franchising approximately 61,000 restaurants in over 150 countries, providing diversification and resilience.

Leadership and Strategic Changes

The CEO transition with a focus on strategic changes and brand extensions could positively impact sales and returns.

Technology and Innovation

Yum! Brands is leveraging technology through their new BYTE suite of products and a partnership with Nvidia, enhancing their global defensive prowess.

Negative Factors

Earnings and Guidance

The negative stock reaction is attributed to solid TB SSS, though it missed expectations and had softer than expected 2Q development and guidance for 4Q.

Financial Performance

Core operating profit growth was well below YUM’s long-term algorithm.

Market Competition

The sales momentum at Taco Bell US likely waned due to tougher competition and increased expenses.

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 demonstrates 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	4.09B	3.58B	3.50B	3.31B	3.17B	2.69B
EBITDA	2.91B	2.71B	2.48B	2.33B	2.33B	1.76B
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: 146.77
• 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 146.77 is above the 20-day moving average (MA) of 144.79, above the 50-day MA of 145.42, and above the 200-day MA of 142.22, indicating a bullish trend. The MACD of -0.83 indicates Negative momentum. The RSI at 54.11 is Neutral, neither overbought nor oversold. The STOCH value of 63.10 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
YUMC	76 Outperform	$16.53B	18.52	15.84%	1.78%	3.53%	16.64%
MCD	70 Outperform	$220.47B	26.46	-216.57%	2.26%	1.17%	2.09%
DPZ	68 Neutral	$15.30B	26.16	-14.74%	1.44%	3.65%	5.71%
YUM	66 Neutral	$39.44B	28.06	-19.43%	1.88%	11.30%	-7.82%
SBUX	66 Neutral	$106.13B	40.38	-47.07%	2.62%	0.60%	-35.19%
Sector *	61 Neutral	$17.22B	11.49	-5.97%	3.08%	1.37%	-15.54%
CMG	58 Neutral	$57.43B	38.43	42.59%	―	8.57%	10.72%

Yum! Brands Corporate Events

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.

The most recent analyst rating on (YUM) stock is a Hold with a $144.00 price target. To see the full list of analyst forecasts on Yum! Brands stock, see the YUM Stock Forecast page.

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.