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Papa John's (PZZA) Well Poised for Growth: Should You Add?
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On Dec 27, we issued an updated research report on Papa John's International Inc. (PZZA - Free Report) , which operates and franchises pizza delivery and carryout restaurants in the U.S and internationally.
The company’s continued international expansion plans, strategic partnerships, strong digital platform and various sales initiatives continue to enhance prospects.
Papa John’s is well poised for earnings growth with the current growth estimate of 19.9% for 2016. Moreover, the company’s shares gained over 55% year to date, outperforming 1.4% growth registered by the Zacks categorized Retail-Restaurants industry.
Further, the stock has actually seen estimates rise in the past 60 days for the current fiscal by about 2.4%. Owing to this upward revision in estimates, Papa John’s currently carries a Zacks Rank #2 (Buy) which further underscores the potential of this company.
What’s Driving Papa John’s?
Papa John’s is the third largest take-out and pizza delivery restaurant chain in the world. The company’s commitment to provide quality food and deliver better ingredients to its customers is commendable and should appeal to the health conscious customers.
Meanwhile, large scale international expansion has been the backbone of Papa John’s operations recently. In fact, the third quarter of 2016 marked the 27th consecutive quarter of positive comps in the international segment. The company has more than 1500 international restaurants and intends to open the 5000th restaurant globally by the end of 2016.
Since nearly 85% of the company’s restaurants are franchised, we believe re-franchising efforts will help the company reduce its capital requirements and facilitate earnings per share growth and ROE expansion.
Moreover, the company’s online and digital marketing activities have increased significantly over the past several years. Also, Papa John’s aims to continue making investments in technology which will be focused on foundational improvements to their digital channels to increase order conversion rate, frequency and ticket average.
Papa John’s is the official pizza sponsor of the Major League Baseball (MLB) and National Football League (NFL). Notably, these sports partnerships continue to drive growth on the local and national levels as it increases the company’s visibility as a brand and attracts customers through digital and social media.
Risks
Since Papa John’s has a considerable international presence, it is exposed to risks of fluctuations in currency exchange rates.
Moreover, the restaurant industry has been experiencing low consumption over the last few quarters. Higher health care costs and still-tightened credit availability continue to hurt consumer discretionary spending in the U.S. As a result, Americans are unwilling to dine out, which is hurting the company’s sales.
Other Key Picks
Other favorably placed stocks in the industry include Bob Evans Farms, Inc. , Dave & Buster's Entertainment, Inc. (PLAY - Free Report) and Bojangles', Inc. .
For fiscal 2017, Bob Evans’ EPS is expected to grow 10.9%.
Dave & Buster's surpassed the Zacks Consensus Estimate for earnings in each of the last four quarters, with an average beat of 37.8%.
Bojangles' carries a Zacks Rank #2. Earnings are expected to grow 16.2% in 2016.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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Papa John's (PZZA) Well Poised for Growth: Should You Add?
On Dec 27, we issued an updated research report on Papa John's International Inc. (PZZA - Free Report) , which operates and franchises pizza delivery and carryout restaurants in the U.S and internationally.
The company’s continued international expansion plans, strategic partnerships, strong digital platform and various sales initiatives continue to enhance prospects.
Papa John’s is well poised for earnings growth with the current growth estimate of 19.9% for 2016. Moreover, the company’s shares gained over 55% year to date, outperforming 1.4% growth registered by the Zacks categorized Retail-Restaurants industry.
Further, the stock has actually seen estimates rise in the past 60 days for the current fiscal by about 2.4%. Owing to this upward revision in estimates, Papa John’s currently carries a Zacks Rank #2 (Buy) which further underscores the potential of this company.
What’s Driving Papa John’s?
Papa John’s is the third largest take-out and pizza delivery restaurant chain in the world. The company’s commitment to provide quality food and deliver better ingredients to its customers is commendable and should appeal to the health conscious customers.
Meanwhile, large scale international expansion has been the backbone of Papa John’s operations recently. In fact, the third quarter of 2016 marked the 27th consecutive quarter of positive comps in the international segment. The company has more than 1500 international restaurants and intends to open the 5000th restaurant globally by the end of 2016.
Since nearly 85% of the company’s restaurants are franchised, we believe re-franchising efforts will help the company reduce its capital requirements and facilitate earnings per share growth and ROE expansion.
Moreover, the company’s online and digital marketing activities have increased significantly over the past several years. Also, Papa John’s aims to continue making investments in technology which will be focused on foundational improvements to their digital channels to increase order conversion rate, frequency and ticket average.
Papa John’s is the official pizza sponsor of the Major League Baseball (MLB) and National Football League (NFL). Notably, these sports partnerships continue to drive growth on the local and national levels as it increases the company’s visibility as a brand and attracts customers through digital and social media.
Risks
Since Papa John’s has a considerable international presence, it is exposed to risks of fluctuations in currency exchange rates.
Moreover, the restaurant industry has been experiencing low consumption over the last few quarters. Higher health care costs and still-tightened credit availability continue to hurt consumer discretionary spending in the U.S. As a result, Americans are unwilling to dine out, which is hurting the company’s sales.
Other Key Picks
Other favorably placed stocks in the industry include Bob Evans Farms, Inc. , Dave & Buster's Entertainment, Inc. (PLAY - Free Report) and Bojangles', Inc. .
Bob Evans and Dave & Buster's sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
For fiscal 2017, Bob Evans’ EPS is expected to grow 10.9%.
Dave & Buster's surpassed the Zacks Consensus Estimate for earnings in each of the last four quarters, with an average beat of 37.8%.
Bojangles' carries a Zacks Rank #2. Earnings are expected to grow 16.2% in 2016.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>