Papa Johns International Inc (PZZA) stock analysis

P/E below its 5-year median

Papa Johns International's P/E of 25.6 is below its own 5-year median of 28.2.

P/E below the industry

Papa Johns International's P/E of 25.6 is below the Eating and Drinking Places median of 28.5.

EV/EBITDA below its 5-year median

Papa Johns International's EV/EBITDA of 7.8 is below its 5-year median of 12.4.

P/S below the industry

Papa Johns International's price-to-sales of 0.33 is below the Eating and Drinking Places median of 0.73 (book value is negative, so we use sales).

Trading below fair value

The share price of $19.19 is below our fair value estimate of $29.91.

Margin of safety over 20%

The price is 35.9% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -0.8% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -21.9% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -32.1% over the last twelve months, against a 5-year average of -12.0% a year.

Growing slower than the industry

Revenue grew -8.3% over the last twelve months; the Eating and Drinking Places median is 5.9%.

Guidance lowered

Papa Johns International lowered its 2026 Diluted shares outstanding outlook on Aug 6, 2026.

Gross margin improving

Gross margin was 28.9% over the last twelve months, against 28.8% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on capital over 10%

Return on invested capital was 21.1%, above the 10% that usually covers the cost of capital.

Return on equity against the industry

Needs positive equity.

Earnings shrank over 5 years

Net income shrank 12.0% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 1.4% over the last twelve months, against a 5-year average of 3.7%.

Net margin below the industry

Papa Johns International's net margin of 1.4% is below the Eating and Drinking Places median of 1.9%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 11.0% of total debt; we look for at least 20%.

Interest coverage

Interest expense is not reported separately.

Short-term assets don't cover short-term debts

Current assets are 0.77 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.41; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Papa Johns International paid dividends worth 7.2% of the share price over the last twelve months.

Yield above Treasuries

The 7.2% yield is above the 4.4% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 3.8% or more; Papa Johns International yields 7.2%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Not covered by earnings

Dividends take 178% of net income, leaving little room.

Not covered by free cash flow

Dividends take 217% of free cash flow.