Update shared on11 Sep 2025
Fair value Decreased 8.04%Potbelly's consensus analyst price target was lowered to $16.71 following its agreement to be acquired by RaceTrac for $17.12 per share, which limits further upside and reprices fair value in line with the acquisition terms.
Analyst Commentary
- Potbelly entered into an agreement to be acquired by RaceTrac for $17.12 per share in an all-cash transaction.
- The announced acquisition price represents a premium to Potbelly's previous trading levels.
- The deal includes agreements to tender shares at the acquisition price, increasing likelihood of completion.
- Bullish analysts raised price targets to match the deal price but downgraded the rating due to limited upside post-acquisition.
- Anticipation that the acquisition by RaceTrac will close as agreed, capping further appreciation potential for Potbelly shares.
What's in the News
- RaceTrac entered into a definitive merger agreement to acquire Potbelly for approximately $560 million, offering $17.12 per share; the deal requires regulatory and shareholder approval and is expected to close in the fourth quarter of 2025.
- Potbelly completed a share repurchase program, buying back 393,884 shares (1.32% of outstanding) for $3.53 million.
- The company raised full-year 2025 earnings guidance, projecting same store sales growth between 2.0% and 3.0%, and gave Q3 guidance of 3.25% to 4.25% same store sales growth.
- Potbelly launched Hot Pepper Flavored Chips in partnership with Zapp’s, expanding its exclusive food offering.
- Potbelly was added to multiple Russell value-focused indexes, including the Russell 2000 Value, 2500 Value, 3000 Value, Microcap Value, and Small Cap Comp Value benchmarks.
Valuation Changes
Summary of Valuation Changes for Potbelly
- The Consensus Analyst Price Target has fallen from $18.17 to $16.71.
- The Future P/E for Potbelly has fallen from 69.66x to 64.06x.
- The Discount Rate for Potbelly remained effectively unchanged, at 9.46%.
Disclaimer
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