Papa John’s (PZZA, $43.15) struggles, but shareholders remain optimistic
Papa John’s International fell short of analysts’ fourth quarter expectations, as same store sales declined by 8.1% in North America. Outside of North America, same-store sales saw smaller declines of 2.6%.
In the fiscal fourth quarter, Papa John’s rocked to a net loss of $13.8 million, or 44 cents per share, from net income of $28.5 million, or 81 cents per share, a year earlier. Net sales fell 20% to $374.0 million versus analyst expectations of $390.1 million. Adjusted earnings per share clocked-in at 15 cents versus an expected 17 cents.
It is alleged that sales suffered after the company’s founder and former CEO, John Schnatter, used a racial slur in a conference call.
Since then the company has been trying to improve its public image. It spent $2.2 million during the fourth quarter — and $5.8 million total during fiscal 2018 — on PR costs. In January, the Papa John’s Foundation gave a $500,000 grant to Bennett College, a struggling historically black college for women.
The company has also launched a new loyalty program that will help boost its sales through analysis of customer data. To encourage customers to join the program, the pizza chain was offering a variety of deals, including free cheese sticks when customers spent more than $12.
Papa John's is also diversifying its offerings with six new specialty pizzas, such as Ultimate Pepperoni and Zesty Italian Trio, as well as the Hot Honey and Chicken Waffles pizza, the winner of a Twitter poll it conducted.
In light of all these upgrades, the company is expecting earnings of $1.00 to $1.20 per share in fiscal 2019. Analysts are also expecting full-year earnings of $1.20 per share. The company also has plans to open 75-100 new stores during 2019.
PZZA's Stochastic Oscillator is remaining in oversold zone for 8 days
The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an uptrend is expected.
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator shows that the ticker has stayed in the oversold zone for 6 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an Uptrend is expected.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where PZZA advanced for three days, in of 291 cases, the price rose further within the following month. The odds of a continued upward trend are .
PZZA may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on December 10, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on PZZA as a result. In of 84 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for PZZA turned negative on December 11, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 50 similar instances when the indicator turned negative. In of the 50 cases the stock turned lower in the days that followed. This puts the odds of success at .
The 10-day moving average for PZZA crossed bearishly below the 50-day moving average on November 19, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 10 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where PZZA declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for PZZA entered a downward trend on December 18, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.000) is normal, around the industry mean (10.916). P/E Ratio (13.882) is within average values for comparable stocks, (57.789). PZZA's Projected Growth (PEG Ratio) (1.144) is slightly lower than the industry average of (1.774). Dividend Yield (0.046) settles around the average of (0.039) among similar stocks. P/S Ratio (0.627) is also within normal values, averaging (8.558).
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating slightly worse than average price growth. PZZA’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. PZZA’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 82, placing this stock worse than average.
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General Information
an operator of pizza delivery and restaurants
Industry Restaurants