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Papa John's International NasdaqGS:PZZA Stock Report

Last Price


Market Cap







27 Sep, 2022


Company Financials +
PZZA fundamental analysis
Snowflake Score
Future Growth3/6
Past Performance1/6
Financial Health1/6

PZZA Stock Overview

Papa John's International, Inc. operates and franchises pizza delivery and carryout restaurants under the Papa John's trademark in the United States and internationally.

Papa John's International Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Papa John's International
Historical stock prices
Current Share PriceUS$75.38
52 Week HighUS$140.68
52 Week LowUS$72.66
1 Month Change-8.11%
3 Month Change-11.48%
1 Year Change-39.79%
3 Year Change43.36%
5 Year Change6.76%
Change since IPO3,776.69%

Recent News & Updates

Sep 14

Papa John's Stock? No. Short Puts? Definitely.

Summary I think Papa John's is a decent, recession-proof business, and I'm intrigued by the fact that the shares have declined about 37% over the past year. Although the dividend is reasonably well covered, I don't think the shares are sufficiently cheap. I'll remind investors that the preservation of capital is of critical importance. Thankfully the options market offers reasonably good risk-adjusted returns by selling put options. Over the past year, shares of Papa John's International Inc. (NASDAQ:PZZA) are down about 37%, and this has me intrigued. I'm of the view that Pizza is a relatively recession resistant foodstuff, and I'm of the view that we're on the brink of a recession, and therefore the product that these people sell should hold up relatively well in my view. It doesn't hurt that my former employer has recently characterised this company as a "favourite idea to capitalise on potential consumer-trade down effect with restaurants." I'll decide whether or not it makes sense to take a position in this business by looking at the financial history, paying particular attention to the sustainability of the dividend. In addition, I'm going to look at the valuation, because, as we should all know by now, a great business can be a disastrously bad investment if you overpay for it. Welcome to the "thesis statement" portion of my article. It's here where I present you with the "gist" of my thinking. I do this for a few reasons. First, you may have missed the title and the bullet points, above. This will give you one more opportunity to glean the highlights of the article before you wade into it. Second, I offer the thesis statement paragraph in a heroic effort to potentially save you some time. You're welcome. Finally, I know that my writing can be a bit tough to take for some. For example, some may be bothered by the fact that I spell words like "labour" and "favourite" properly. Whatever the reason that rings most true for you, I think we can all agree that there's no doot aboot the fact that the "thesis statement" is a handy addition to every article. I'm of the view that Papa John's is a great business with a sustainable dividend. I don't like the addition of debt, but I'll admit that it's been worse in the past, and that future contractual calls on cash aren't egregious in my view. The problem for me is that the stock is neither cheap nor expensive at the moment, so this isn't a very compelling investment at current levels. Just because I don't want to buy the stock, though, doesn't mean that there's nothing to be done here. I think investors can earn a reasonable, though not huge, premium from selling relatively deep out of the money put options. As I think I've demonstrated on many occasions on this forum, these are a great way to enhance returns while reducing risk. Financial Snapshot I'd characterise the long term financial history here as "choppy." I describe it thus because both revenue and net income have moved around fairly dramatically over the years. For example, revenue reached $1.783 billion in 2017, and crashed to $1.619 billion two years later. Over the same time span, net income crashed from $102.3 million to $4.87 million. An investor who buys this stock should not expect a smooth ride, or consistent upward growth. That written, the company has remained consistently profitable over the years, with the exception of 2021, which was negatively impacted by a $109.85 million dividend on redemption of Series B Convertible Preferred stock. The one thing that does disturb me somewhat is the fact that the level of indebtedness has grown dramatically over the past few years. For example, it's up about 26.6% over the past year alone. That written, it has been higher (in 2018), and the company is sitting on a relatively large cash hoard of $52.15 million, which represents about 9.7% of total indebtedness. Thus, I don't worry about a solvency crisis here anytime soon. Dividend Sustainability I'm as interested in financial history as the next finance nerd, but investors are particularly interested in a company's financial future for obvious reasons. In particular, people may be interested to learn about the level of dividend sustainability for two reasons. First, the cash flows received from dividends help smooth investor returns, and they obviously make planning your financial future much easier. Second, a sustainable dividend is obviously supportive of stock price. So, readers may be curious about what goes on with the dividend. If you readers have an itch, I'm absolutely committed to scratching it, so I want to spend some time writing about the dividend. When it comes to tracking the sustainability of a given dividend, I look at cash. I specifically want to compare the size and timing of future cash obligations to the current and likely future sources of cash. Let's start with the obligations. I've taken the liberty of clipping the size and timing of future debt payments from page 41 of the latest 10-K for your enjoyment and edification. We see from the table below that the company is "on the hook" for ~$62.6 million this year, and an average of about $55 million over the next two years. Papa John's Contractual Obligations (Papa John's latest 10-K) Against these obligations the company has about $52.15 million in cash and equivalents. Additionally, they've generated an average of $144 million in cash from operations over the past three years, while spending an average of about $45.7 million on CFI activities. All of the above suggests to me that the dividend is very well covered. For this reason, I'd be very happy to buy shares at the right price. Papa John's Financials (Papa John's investor relations) The Stock My regulars know that I've talked myself out of some profitable trades with the words "at the right price", but I'd rather miss out on some gains than lose capital. My regulars also know that I consider the "business" and the "stock" to be quite different things. Every business buys a number of inputs and turns them into a final product. In this case moderately tasty pizza. The stock, on the other hand, is an ownership stake in the business that gets traded around in a market that aggregates the crowd's rapidly changing views about the future health of the business, future demand for pizza and other "trade down" food choices. It may also be the case that some analyst decides that "future growth catalysts" are weaker than once thought, and the stock falls in price in sympathy, in spite of absolutely no change at the company. The stock also moves around because it gets taken along for the ride when the crowd changes its views about "the market" in general. So, in some sense, the stock is "doubly buffeted" by the crowds' rapidly changing views about a given company, and the crowd's rapidly changing views about the overall stock market. This is troublesome, but it's a potential source of profit because these price movements have the potential to create a disconnect between market expectations and subsequent reality. In my experience, this is the only way to generate profits trading stocks: by determining the crowd's expectations about a given company's performance, spotting discrepancies between those assumptions and stock price, and placing a trade accordingly. I've also found it's the case that investors do better/less badly when they buy shares that are relatively cheap, because cheap shares correlate with low expectations. Cheap shares are insulated from the buffeting that more expensive shares are hit by. As my regulars know, I measure the relative cheapness of a stock in a few ways. For example, I like to look at the ratio of price to some measure of economic value, like earnings, sales, free cash, and the like. I like to see a company trading at a discount to both the overall market, and to its own history. At the moment, the company is trading near the middle of its valuation range, per the following: PZZA data by YCharts While the shares are neither cheap nor expensive, I think it's noteworthy that the dividend yield is on the high side. So, while investors may be paying an average price, they're getting an above average income stream from this stock. PZZA data by YCharts In addition to looking at simple ratios, I actually use a large number of other, more complex valuation measures, one of which involves trying to understand the assumptions currently embedded in price. If you read me regularly, you know that I rely on the work of Professor Stephen Penman, and increasingly Mauboussin and Rappaport to do this. This approach uses the stock price itself as a source of information. It involves "reverse engineering" the assumptions that cause the current price. When I apply this approach to Papa John's, it seems the market is assuming growth of about 4% going forward at the moment. Just like the stock price itself, this is neither overly attractive, nor unattractive. Given that I'm in the mood to preserve capital rather than buy companies that are "neither cheap nor dear", I'll pass on Papa John's at current prices. Options As Alternative Just because I don't want to buy at the current price, doesn't mean I think there's no way to make money here. Given the sustainability of the dividend, I'd be happy to buy Papa John's at the right price. I have a choice in how I might do this. I can wait for the shares to fall in price. Not only is this boring, but the shares may never fall sufficiently in price. Alternatively, I can generate some income today by selling put options with strike prices that I'd be willing to pay. I've characterised these as "win-win" trades because the outcome is great no matter what happens. If the shares remain above the strike, I'll simply pocket the premium, which is never a hardship. If the shares fall, I'll be obliged to buy, but will do so at a price that I determined to be a good one. Additionally, I'll be "less badly off" than the people who bought at today's market price, which is also a decent outcome. In terms of specifics, I like the April 2023 short put with a strike of $60. I'd be happy to buy at this level, because it lines up with a relatively cheap price to sales ratio of about 1.05. This price also lines up with a nice 2.05% dividend yield. These are currently bid at $0.60 So, if the shares don't happen to drop 27% over the next seven months, I'll pocket this premium. If the shares fall below $60, I'll be obliged to buy, but will do so at a net price of $59.40. This is also a very positive outcome in my view. This is why I characterise these as "win-win" trades. It's that time again. Welcome to the point in the article where I get to indulge in my semi-sadistic tendency to spoil people's moods by pointing out that the phrase "win-win" is really just a bit of rhetoric. This trade, like all others, comes with risk. I consider the risks associated with these instruments to fall into two broad categories: the economic and the emotional. Starting with the economic risks, I'd say that the short puts I advocate are a small subset of the total number of put options out there. I'm only ever willing to sell puts on companies I'd be willing to buy, and at prices I'd be willing to pay. So, I would never advocate that people simply sell puts with the highest premia. In my view, that strategy would lead to disastrous results. So my first bit of advice is to only ever sell puts on companies you want to own at (strike) prices you'd be willing to pay. Take my word on this one, as it's informed by painful history.

Sep 04
Is There An Opportunity With Papa John's International, Inc.'s (NASDAQ:PZZA) 24% Undervaluation?

Is There An Opportunity With Papa John's International, Inc.'s (NASDAQ:PZZA) 24% Undervaluation?

Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Papa John's...

Shareholder Returns

PZZAUS HospitalityUS Market

Return vs Industry: PZZA underperformed the US Hospitality industry which returned -33.9% over the past year.

Return vs Market: PZZA underperformed the US Market which returned -23.7% over the past year.

Price Volatility

Is PZZA's price volatile compared to industry and market?
PZZA volatility
PZZA Average Weekly Movement5.4%
Hospitality Industry Average Movement7.3%
Market Average Movement6.9%
10% most volatile stocks in US Market15.7%
10% least volatile stocks in US Market2.8%

Stable Share Price: PZZA is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: PZZA's weekly volatility (5%) has been stable over the past year.

About the Company

198414,000Rob Lynch

Papa John's International, Inc. operates and franchises pizza delivery and carryout restaurants under the Papa John's trademark in the United States and internationally. It operates through four segments: Domestic Company-Owned Restaurants, North America Commissaries, North America Franchising, and International Operations. The company also operates dine-in and delivery restaurants under the Papa John’s trademark internationally.

Papa John's International Fundamentals Summary

How do Papa John's International's earnings and revenue compare to its market cap?
PZZA fundamental statistics
Market CapUS$2.66b
Earnings (TTM)US$89.31m
Revenue (TTM)US$2.11b


P/E Ratio


P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
PZZA income statement (TTM)
Cost of RevenueUS$1.46b
Gross ProfitUS$643.99m
Other ExpensesUS$554.68m

Last Reported Earnings

Jun 26, 2022

Next Earnings Date

Nov 03, 2022

Earnings per share (EPS)2.53
Gross Margin30.56%
Net Profit Margin4.24%
Debt/Equity Ratio-230.6%

How did PZZA perform over the long term?

See historical performance and comparison



Current Dividend Yield


Payout Ratio
We’ve recently updated our valuation analysis.


Is PZZA undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score


Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for PZZA?

Other financial metrics that can be useful for relative valuation.

PZZA key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.6x
Enterprise Value/EBITDA16.3x
PEG Ratio0.8x

Price to Earnings Ratio vs Peers

How does PZZA's PE Ratio compare to its peers?

PZZA PE Ratio vs Peers
The above table shows the PE ratio for PZZA vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average36.8x
CBRL Cracker Barrel Old Country Store
WING Wingstop
JACK Jack in the Box
WEN Wendy's
PZZA Papa John's International

Price-To-Earnings vs Peers: PZZA is good value based on its Price-To-Earnings Ratio (29.8x) compared to the peer average (36.8x).

Price to Earnings Ratio vs Industry

How does PZZA's PE Ratio compare vs other companies in the US Hospitality Industry?

Price-To-Earnings vs Industry: PZZA is expensive based on its Price-To-Earnings Ratio (29.8x) compared to the US Hospitality industry average (16.4x)

Price to Earnings Ratio vs Fair Ratio

What is PZZA's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

PZZA PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio29.8x
Fair PE Ratio33.9x

Price-To-Earnings vs Fair Ratio: PZZA is good value based on its Price-To-Earnings Ratio (29.8x) compared to the estimated Fair Price-To-Earnings Ratio (33.9x).

Share Price vs Fair Value

What is the Fair Price of PZZA when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: PZZA ($75.38) is trading below our estimate of fair value ($107.44)

Significantly Below Fair Value: PZZA is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is Papa John's International forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

Future Growth Score


Future Growth Score 3/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: PZZA's forecast earnings growth (38.6% per year) is above the savings rate (1.9%).

Earnings vs Market: PZZA's earnings (38.6% per year) are forecast to grow faster than the US market (14.7% per year).

High Growth Earnings: PZZA's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: PZZA's revenue (4.4% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: PZZA's revenue (4.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if PZZA's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Papa John's International performed over the past 5 years?

Past Performance Score


Past Performance Score 1/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: PZZA has a high level of non-cash earnings.

Growing Profit Margin: PZZA became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: PZZA's earnings have declined by 35.7% per year over the past 5 years.

Accelerating Growth: PZZA has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: PZZA has become profitable in the last year, making it difficult to compare its past year earnings growth to the Hospitality industry (36.2%).

Return on Equity

High ROE: PZZA's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.

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Financial Health

How is Papa John's International's financial position?

Financial Health Score


Financial Health Score 1/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: PZZA has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: PZZA has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.

Debt to Equity History and Analysis

Debt Level: PZZA has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: PZZA's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: PZZA's debt is not well covered by operating cash flow (19.1%).

Interest Coverage: PZZA's interest payments on its debt are well covered by EBIT (8x coverage).

Balance Sheet

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What is Papa John's International current dividend yield, its reliability and sustainability?

Dividend Score


Dividend Score 2/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


Current Dividend Yield

Dividend Yield vs Market

Papa John's International Dividend Yield vs Market
How does Papa John's International dividend yield compare to the market?
SegmentDividend Yield
Company (Papa John's International)2.2%
Market Bottom 25% (US)1.7%
Market Top 25% (US)4.7%
Industry Average (Hospitality)2.0%
Analyst forecast in 3 Years (Papa John's International)2.3%

Notable Dividend: PZZA's dividend (2.23%) is higher than the bottom 25% of dividend payers in the US market (1.67%).

High Dividend: PZZA's dividend (2.23%) is low compared to the top 25% of dividend payers in the US market (4.68%).

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, PZZA has been paying a dividend for less than 10 years.

Growing Dividend: PZZA's dividend payments have increased, but the company has only paid a dividend for 9 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (56.5%), PZZA's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (242.7%), PZZA's dividend payments are not well covered by cash flows.

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How experienced are the management team and are they aligned to shareholders interests?


Average management tenure


Rob Lynch (45 yo)





Mr. Robert M. Lynch, also known as Rob, has been President and Chief Executive Officer of Papa John's International, Inc. since August 26, 2019 and also its Director since 2019. Mr. Lynch joined Papa John...

CEO Compensation Analysis

Rob Lynch's Compensation vs Papa John's International Earnings
How has Rob Lynch's remuneration changed compared to Papa John's International's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 26 2022n/an/a


Mar 27 2022n/an/a


Dec 26 2021US$7mUS$900k


Sep 26 2021n/an/a


Jun 27 2021n/an/a


Mar 28 2021n/an/a


Dec 27 2020US$6mUS$900k


Sep 27 2020n/an/a


Jun 28 2020n/an/a


Mar 29 2020n/an/a


Dec 29 2019US$7mUS$312k


Compensation vs Market: Rob's total compensation ($USD7.24M) is about average for companies of similar size in the US market ($USD6.90M).

Compensation vs Earnings: Rob's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: PZZA's management team is considered experienced (3.4 years average tenure).

Board Members

Experienced Board: PZZA's board of directors are considered experienced (3.7 years average tenure).


Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: PZZA insiders have only sold shares in the past 3 months.

Recent Insider Transactions

NasdaqGS:PZZA Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
25 Aug 22SellUS$252,438Marvin BoakyeIndividual2,950US$86.04
24 Nov 21SellUS$1,668,387Robert LynchIndividual12,500US$133.95
19 Nov 21SellUS$532,077Jack SwayslandIndividual4,000US$133.76

Ownership Breakdown

What is the ownership structure of PZZA?
Owner TypeNumber of SharesOwnership Percentage
General Public104,7660.3%
Individual Insiders870,8182.5%
Hedge Funds2,329,7306.6%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Top Shareholders

Top 25 shareholders own 73.09% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
BlackRock, Inc.
The Vanguard Group, Inc.
Starboard Value LP
Allspring Global Investments, LLC
AllianceBernstein L.P.
Jackson Square Partners, LLC
State Street Global Advisors, Inc.
1,086,257$81.9m-2.71%no data
Artisan Partners Limited Partnership
Renaissance Technologies LLC
Citadel Advisors LLC
Columbia Management Investment Advisers, LLC
Stephens Investment Management Group, LLC
Westwood Management Corp.
Eaton Vance Management
T. Rowe Price Group, Inc.
Principal Global Investors, LLC
Dimensional Fund Advisors LP
Fidelity International Ltd
Geode Capital Management, LLC
J.P. Morgan Asset Management, Inc.
1832 Asset Management L.P.
Northern Trust Global Investments
BNY Mellon Asset Management
Wellington Management Group LLP
Jeffrey Smith
434,221$32.7m0%no data

Company Information

Papa John's International, Inc.'s employee growth, exchange listings and data sources

Key Information

  • Name: Papa John's International, Inc.
  • Ticker: PZZA
  • Exchange: NasdaqGS
  • Founded: 1984
  • Industry: Restaurants
  • Sector: Consumer Services
  • Implied Market Cap: US$2.664b
  • Shares outstanding: 35.35m
  • Website:

Number of Employees


  • Papa John's International, Inc.
  • 2002 Papa John’s Boulevard
  • Louisville
  • Kentucky
  • 40299-2367
  • United States


TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PZZANasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJun 1993
PP1DB (Deutsche Boerse AG)YesCommon StockDEEURJun 1993

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/27 00:00
End of Day Share Price2022/09/27 00:00
Annual Earnings2021/12/26

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.