Papa John's International Inc

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PZZA : NASDAQ : Services
$83.83 | %
Today's Range: 83.09 - 84.13
Avg. Daily Volume: 540300.0
01/20/17 - 4:00 PM ET

Financial Analysis


PAPA JOHNS INTERNATIONAL INC's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. PAPA JOHNS INTERNATIONAL INC has weak liquidity. Currently, the Quick Ratio is 0.68 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 150.97% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)422.44389.28
EBITDA ($mil)44.837.9
EBIT ($mil)34.1827.44
Net Income ($mil)21.4717.97


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)19.1124.44
Total Assets ($mil)498.79494.62
Total Debt ($mil)311.57239.0
Equity ($mil)-24.6348.32


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin20.219.41
EBITDA Margin10.69.73
Operating Margin8.097.05
Sales Turnover3.393.33
Return on Assets19.0214.59
Return on Equity0.0149.36
Debt Q3 FY16 Q3 FY15
Current Ratio1.141.28
Debt/Capital1.090.83
Interest Expense1.761.18
Interest Coverage19.4723.25


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)36.7939.04
Div / share0.20.18
EPS0.570.45
Book value / share-0.671.24
Institutional Own % n/a n/a
Avg Daily Volume542917.0308392.0

Valuation


BUY. PAPA JOHNS INTERNATIONAL INC's P/E ratio indicates a premium compared to an average of 30.75 for the Hotels, Restaurants & Leisure industry and a premium compared to the S&P 500 average of 25.49. Normally, for additional comaprison, we would look at the price-to-book ratio; however, this company's price-to-book ratio is negative making the value useless for comparisons. The price-to-sales ratio is below the S&P 500 average and is well below the industry average, indicating a discount.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
PZZA 34.53 Peers 30.75   PZZA 20.19 Peers 15.71

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

PZZA is trading at a premium to its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

PZZA is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
PZZA 30.76 Peers 31.36   PZZA 1.04 Peers 1.82

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

PZZA is trading at a valuation on par with its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

PZZA trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
PZZA NM Peers 7.45   PZZA 39.10 Peers 70.64

Neutral. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

PZZA's P/B is negative making this valuation measure meaningless.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, PZZA is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
PZZA 1.87 Peers 2.93   PZZA 2.71 Peers 4.94

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

PZZA is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

PZZA significantly trails its peers on the basis of sales growth

 

 

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