Prices of PLKI have been stalled in a relatively tight range for the past year with a weakening On-Balance-Volume (OBV) line telling us that volume has been heavier on down days. Also, the price of PLKI just broke below the flat 50-day and 200-day simple moving averages.
This long-term chart of PLKI shows a couple things worth nothing. First, prices have had a meaningful rally since late 2011, so we have something to reverse. Second, the OBV line does not really confirm the rally in later 2014 where prices made a new high for the move up. And last, prices have declined below the 40-week moving average, which has begun to turn down. Chart support for PLKI comes in around $40, which could be reached next year.
TheStreet Ratings team rates POPEYES LOUISIANA KITCHEN as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate POPEYES LOUISIANA KITCHEN (PLKI) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- PLKI's revenue growth has slightly outpaced the industry average of 1.5%. Since the same quarter one year prior, revenues rose by 10.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- POPEYES LOUISIANA KITCHEN has improved earnings per share by 25.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, POPEYES LOUISIANA KITCHEN increased its bottom line by earning $1.60 versus $1.41 in the prior year. This year, the market expects an improvement in earnings ($1.90 versus $1.60).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Hotels, Restaurants & Leisure industry average. The net income increased by 24.1% when compared to the same quarter one year prior, going from $8.30 million to $10.30 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, POPEYES LOUISIANA KITCHEN's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has increased to $18.30 million or 46.40% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 1.72%.
- You can view the full analysis from the report here: PLKI