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 in downward trend: 10-day moving average broke below 50-day moving average on November 19, 2024
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 11 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 .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 65 cases where PZZA's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
PZZA moved below its 50-day moving average on November 12, 2024 date and that indicates a change from an upward trend to a downward trend.
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 .
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where PZZA's RSI Oscillator exited the oversold zone, of 39 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on November 29, 2024. You may want to consider a long position or call options on PZZA as a result. In of 83 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for PZZA just turned positive on December 05, 2024. Looking at past instances where PZZA's MACD turned positive, the stock continued to rise in of 51 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where PZZA advanced for three days, in of 292 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 269 cases where PZZA Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
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 slightly 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 (10.778). P/E Ratio (17.346) is within average values for comparable stocks, (57.470). Projected Growth (PEG Ratio) (1.520) is also within normal values, averaging (1.858). Dividend Yield (0.037) settles around the average of (0.037) among similar stocks. P/S Ratio (0.784) is also within normal values, averaging (8.704).
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady 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