February 8, 2024
Top 10 Stock Papa John's Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Papa John's – Top 10 Stock in SDG 17: Partnerships to achieve the Goal
Papa John's is listed as a top 10 stock on February 08, 2024 in the market index SDG 17 because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 41 (41% performer), Obermatt assesses an overall hold recommendation for Papa John's on February 08, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Restaurants |
| Index | Dividends USA, SDG 12, SDG 17, SDG 2, SDG 5, SDG 8, NASDAQ, S&P MIDCAP |
| Size class | Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Papa John's Hold
| 360 METRICS | February 8, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 86 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 15 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 34 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 55 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 41 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 41 (better than 41% compared with alternatives), overall professional sentiment and financial characteristics for the stock Papa John's are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Papa John's. The consolidated Value Rank has an attractive rank of 86, which means that the share price of Papa John's is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 86% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 55, which means that professional investors are more optimistic about the stock than for 55% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 15, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 34, meaning the company has a riskier financing structure than 66 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 41, Papa John's is worse than 59% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 86) and positive market sentiment in the professional investor community (Sentiment Rank of 55), but growth expectations are below-average (Growth Rank of 15) and the financing structure is on the risky side(Safety Rank of 34). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Papa John's is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Papa John's positive
ANALYSIS: With an Obermatt Sentiment Rank of 55 (better than 55% compared with alternatives), overall professional sentiment and engagement for the stock Papa John's is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and half above average for Papa John's. Analyst Opinions are at a rank of 44 (worse than 56% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 48, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 45, which means that professional investors hold less stock in this company than in 55% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for Papa John's is Market Pulse, with a rank of 75, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 75% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 55 (more positive than 55% compared with investment alternatives), Papa John's has a reputation among professional investors that is above-average compared with that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Papa John's Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 86 (better than 86% compared with alternatives) for 2024, Papa John's shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, where three out of four indicators are above average for Papa John's. Price-to-Sales (P/S) is 54 which means that the stock price compared with what market professionals expect for future sales is lower than for 54% of comparable companies, indicating a good value for Papa John's's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 83. Finally, compared with other companies in the same industry, dividend yields of Papa John's are expected to be higher than for 84% of all competitors (a Dividend Yield rank of 84). The only low rank is for expected profits with a Price-to-Profit Rank of 33, indicating that the market expects the company's profit to be low despite a high dividend. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 86, is a buy recommendation based on Papa John's's stock price compared with the company's operational size and dividend yields. The low Profit Rank could result from a one-off charge, for instance, for an accident, a legal settlement, or a restructuring project. If the company keeps its dividends high, the low expected profit may be transitory. If that is the case, the three good value ranks for Sales, Capital, and Dividends are reliable indicators for good stock price value, a low stock price. ...read more
Growth Strategy: Papa John's Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 15 (better than 15% compared with alternatives), Papa John's shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for Papa John's. Sales Growth has a rank of 45, which means that currently professionals expect the company to grow less than 55% of its competitors. The same is valid for Profit Growth, with a rank of 16, and Capital Growth with 45. In addition, Stock Returns have a below market rank of 31, which means that the stock returns have recently been below 69% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 15, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: Papa John's Debt Financing Safety below-average
| SAFETY METRICS | February 8, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 5 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 63 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 65 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 34 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 34 (better than 34% compared with alternatives), the company Papa John's has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Papa John's is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Papa John's. Refinancing is at 63, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 63% of its competitors. Liquidity is also good at 65, meaning the company generates more profit to service its debt than 65% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 5, which means the company has an above-average debt-to-equity ratio. It has more debt than 95% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 34 (worse than 66% compared with alternatives), Papa John's has a financing structure that is riskier than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Papa John's could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Papa John's Below-Average Financial Performance
| COMBINED PERFORMANCE | February 8, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 86 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 15 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 65 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 41 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 41 (worse than 59% compared with investment alternatives), Papa John's (Restaurants, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Papa John's are a good value (attractively priced) with a consolidated Value Rank of 86 (better than 86% of alternatives) but show below-average growth (Growth Rank of 15), and are riskily financed (Safety Rank of 34), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 41, is a hold recommendation based on Papa John's's financial characteristics. As the company Papa John's's key financial metrics exhibit good value (Obermatt Value Rank of 86) but low growth (Obermatt Growth Rank of 15) and risky financing practices (Obermatt Safety Rank of 34), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 86% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.