Loop Capital has revised its price target for Papa John's (PZZA, Financial), reducing it from $60 to $56, while maintaining a Buy rating on the stock. The adjustment follows the company's performance in the first quarter, where it exceeded expectations in North America franchised store comparisons. Furthermore, ongoing improvements have been noted in the current trends for the second quarter, according to the analyst's update.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 13 analysts, the average target price for Papa John's International Inc (PZZA, Financial) is $50.02 with a high estimate of $62.00 and a low estimate of $36.00. The average target implies an upside of 29.58% from the current price of $38.60. More detailed estimate data can be found on the Papa John's International Inc (PZZA) Forecast page.
Based on the consensus recommendation from 17 brokerage firms, Papa John's International Inc's (PZZA, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Papa John's International Inc (PZZA, Financial) in one year is $79.02, suggesting a upside of 104.72% from the current price of $38.6. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Papa John's International Inc (PZZA) Summary page.
PZZA Key Business Developments
Release Date: May 08, 2025
- Global System-Wide Restaurant Sales: $1.22 billion for Q1, up 1% year-over-year in constant currency.
- North America Comparable Sales: Decreased 2.7% in Q1 compared to the prior year.
- International Comparable Sales: Increased 3% year-over-year in Q1.
- Total Revenues: $518 million for Q1, up 1% from last year.
- Company-Owned Restaurants Revenue: Decreased by $17 million in Q1.
- Commissary Revenues: Increased by $11 million in Q1.
- Advertising Fund Revenues: Increased by $7 million in Q1.
- Adjusted EBITDA: Approximately $50 million for Q1, down from $61 million a year ago.
- Domestic Company-Owned Restaurant EBITDA Margins: Declined approximately 550 basis points year-over-year.
- North America Commissary Segment EBITDA Margins: 7.3%, an increase of approximately 50 basis points year-over-year.
- Total Available Liquidity: Approximately $494 million at the end of Q1.
- Net Cash Provided by Operating Activities: $31 million for Q1.
- Free Cash Flow: $90 million for Q1.
- Global Restaurant Count: 6,019 at the end of Q1.
- North America Restaurant Openings: 18 new restaurants in Q1.
- North America Restaurant Closures: 16 closures in Q1.
- International Restaurant Openings: 29 new restaurants in Q1.
- International Restaurant Closures: 42 closures in Q1.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Papa John's International Inc (PZZA, Financial) reported a 4% increase in pizza orders compared to the previous year, indicating strong demand for their core product.
- The company has successfully implemented a barbell strategy, offering both premium and value-oriented menu items, which has driven traffic and improved sales.
- Papa John's International Inc (PZZA) has seen significant gains in customer awareness and consideration, attributed to their effective marketing campaigns like 'Meet the Makers'.
- The partnership with Google Cloud aims to enhance the ordering and delivery experience, leveraging AI for personalization and operational efficiency.
- The loyalty program changes have led to a substantial increase in membership, with over 1 million new members in Q1, enhancing customer retention and repeat purchases.
Negative Points
- North America comparable sales decreased by 2.7% in the first quarter, reflecting challenges in the domestic market.
- The company-owned restaurant segment saw a revenue decline of $17 million, primarily due to closures and refranchising efforts.
- Adjusted EBITDA decreased from $61 million to approximately $50 million, impacted by higher G&A expenses and increased marketing investments.
- Papa John's International Inc (PZZA) faces ongoing pressure from competitive pricing and promotional cycles in the QSR pizza category.
- The company is experiencing challenges in improving delivery experiences, which were highlighted in a mystery shop program.
