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Papa John's (PZZA) Stock Up on Expansion Plans in Cambodia
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Papa John's International, Inc. (PZZA - Free Report) recently announced plans to boost its presence in Cambodia. Notably, the company plans to add 15 new restaurants over the next three years. Following the announcement, shares of the company gained 2.6% during trading hours on Apr 7. Earlier, the company had unveiled its store at Phnom Penh in March.
Papa John’s is committed toward developing and maintaining a strong franchise system. The company is continually striving to overcome barriers to expand in existing international markets and identify new market opportunities.
In recent years, the company has entered 12 new countries, including France, Spain, Tunisia, Iraq, the Netherlands, Morocco, Kazakhstan, Kyrgyzstan, Poland, Bahamas, Pakistan and Portugal. It is also seeking potential franchisees in Brazil, Japan and Southeast Asia. Over the next several years, the company plans to increase its international units, a large portion of which will be franchised. The company is operating in 48 international countries and territories around the globe.
With respect to the expansion, Jack Swaysland, chief operating officer, International, Papa John's, stated, “Papa John’s is better positioned than ever to accelerate international development, which is a key pillar for the brand’s long-term growth. This is a significant new partnership in Asia, and we look forward to continue growing the Papa John’s family across the globe.”
We believe that re-franchising a large chunk of its system reduces a company’s capital requirements and facilitates earnings per share growth and ROE expansion. Alongside, free cash flow continues to grow, allowing reinvestment for increasing brand recognition and shareholder return.
Price Performance
Shares of Papa John's have gained 10.3% so far this year compared with the industry’s 8.8% growth. The upside can be primarily attributed to product innovation, international expansion and franchising initiatives. Moreover, the company is investing heavily in technology-driven initiatives like digital ordering to boost sales.
However, coronavirus-related woes persist. Considering the negative impact of the pandemic on its business and the industry, the company has not provided fiscal 2021 guidance. Moreover, the company is witnessing high costs associated with product launch, marketing campaigns and other sales-building initiatives. Earnings estimates for 2021 have declined in the past 30 days, depicting analysts’ concern regarding the stock’s growth potential.
Some better-ranked stocks in the same space include Darden Restaurants, Inc. (DRI - Free Report) , Jack in the Box Inc. (JACK - Free Report) and Chuy's Holdings, Inc. (CHUY - Free Report) , each carrying a Zacks Rank #2 (Buy).
Darden 2021 earnings are expected to rise 26.5%.
Jack in the Box has three-five-year earnings per share growth rate of 17%.
Chuy's Holdings has a trailing four-quarter earnings surprise of 126.5%, on average.
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After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
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Papa John's (PZZA) Stock Up on Expansion Plans in Cambodia
Papa John's International, Inc. (PZZA - Free Report) recently announced plans to boost its presence in Cambodia. Notably, the company plans to add 15 new restaurants over the next three years. Following the announcement, shares of the company gained 2.6% during trading hours on Apr 7. Earlier, the company had unveiled its store at Phnom Penh in March.
Papa John’s is committed toward developing and maintaining a strong franchise system. The company is continually striving to overcome barriers to expand in existing international markets and identify new market opportunities.
In recent years, the company has entered 12 new countries, including France, Spain, Tunisia, Iraq, the Netherlands, Morocco, Kazakhstan, Kyrgyzstan, Poland, Bahamas, Pakistan and Portugal. It is also seeking potential franchisees in Brazil, Japan and Southeast Asia. Over the next several years, the company plans to increase its international units, a large portion of which will be franchised. The company is operating in 48 international countries and territories around the globe.
With respect to the expansion, Jack Swaysland, chief operating officer, International, Papa John's, stated, “Papa John’s is better positioned than ever to accelerate international development, which is a key pillar for the brand’s long-term growth. This is a significant new partnership in Asia, and we look forward to continue growing the Papa John’s family across the globe.”
We believe that re-franchising a large chunk of its system reduces a company’s capital requirements and facilitates earnings per share growth and ROE expansion. Alongside, free cash flow continues to grow, allowing reinvestment for increasing brand recognition and shareholder return.
Price Performance
Shares of Papa John's have gained 10.3% so far this year compared with the industry’s 8.8% growth. The upside can be primarily attributed to product innovation, international expansion and franchising initiatives. Moreover, the company is investing heavily in technology-driven initiatives like digital ordering to boost sales.
However, coronavirus-related woes persist. Considering the negative impact of the pandemic on its business and the industry, the company has not provided fiscal 2021 guidance. Moreover, the company is witnessing high costs associated with product launch, marketing campaigns and other sales-building initiatives. Earnings estimates for 2021 have declined in the past 30 days, depicting analysts’ concern regarding the stock’s growth potential.
Zacks Rank & Key Picks
Papa John’s currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the same space include Darden Restaurants, Inc. (DRI - Free Report) , Jack in the Box Inc. (JACK - Free Report) and Chuy's Holdings, Inc. (CHUY - Free Report) , each carrying a Zacks Rank #2 (Buy).
Darden 2021 earnings are expected to rise 26.5%.
Jack in the Box has three-five-year earnings per share growth rate of 17%.
Chuy's Holdings has a trailing four-quarter earnings surprise of 126.5%, on average.
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
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