Papa John's (PZZA) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
Papa John's stock has continued to fall since my opening piece last November, underperforming close peer Domino's by around 60 percentage points in that time. The business has definitely hit something of a soft patch, with comps looking weak and full-year guidance lowered. That said, these shares now only trade for around 10x EBITDA, and only very modest earnings growth assumptions are needed to make that work for investors.
Papa John's (PZZA) has been hurt by the difficult macroeconomic environment, waning consumer confidence and dismal comps growth.
The pizza wars pit the 2 major pizza franchises against each other: Domino's Pizza Inc. NYSE: DPZ versus Papa John's International Inc. NASDAQ: PZZA. While both brands operate in the retail/wholesale sector and have their fans and critics, one stock is clearly winning this war: Domino's.
Ongoing economic challenges and weakening consumer confidence are dampening Papa John's (PZZA) growth prospects.