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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#3294
Positioning
Market Dominance
Retail Trade
Restaurants, Hotels, Motels
$1.5B
Robert M. Lynch
Papa John's International, Inc. operates and franchises pizza delivery and carryout restaurants in the United States and internationally. The company was founded in 1984 and is based in Louisville, Kentucky. As of December 26, 2021, it operated 5,650 restaurants, including 600 company-owned and 5,050 franchised.
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Dates updated upon official exchange announcement.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = PZZA ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$ARCO Arcos Dorados Holdings Inc. | 73 | 85 | 89 | 65 | - | - | 29.1% | 5.1% | 46.8% | 7.3% | 3.3% | 3.2% | 3.4% | 153.0x | $1.5B | VS | |
$IMKTA INGLES MARKETS INC | 70 | 73 | 89 | 76 | 11.3x | 4.1x | 5.3% | 3.3% | 23.9% | 2.2% | 1.6% | -5.4% | 1.0% | 32.0x | $1.3B | VS | |
$SGU STAR GROUP, L.P. | 69 | 82 | 79 | 63 | - | - | 26.2% | 7.8% | 31.5% | 6.4% | 4.1% | 1.0% | 6.1% | 63.0x | $399M | VS | |
$EZPW EZCORP INC | 68 | 77 | 82 | 89 | 7.2x | 4.2x | 12.0% | 6.4% | 58.6% | 11.7% | 8.6% | 9.7% | 0.0% | 51.0x | $1.2B | VS | |
$HTHT H World Group Ltd | 68 | 91 | 44 | 84 | - | - | 24.9% | 4.9% | 100.0% | 21.8% | 13.0% | 6.2% | 2.9% | 45.0x | $101.1B | VS | |
$DDL Dingdong (Cayman) Ltd | 68 | 86 | 82 | 57 | - | - | 42.4% | 4.0% | 100.0% | 0.9% | 1.3% | 12.3% | 0.0% | 201.0x | $1.2B | VS | |
$SBH Sally Beauty Holdings, Inc. | 68 | 83 | 92 | 77 | 5.1x | 2.3x | 27.5% | 6.9% | 51.6% | 8.9% | 5.3% | -0.4% | 0.0% | 177.0x | $1.6B | VS | |
$SPH SUBURBAN PROPANE PARTNERS LP | 67 | 80 | 90 | 53 | - | 13.0x | 18.6% | 4.7% | 60.7% | 14.4% | 7.4% | 7.9% | 7.1% | 202.0x | $1.2B | VS | |
$IHG INTERCONTINENTAL HOTELS GROUP PLC /NEW/ | 67 | 63 | 81 | 67 | - | - | -29.5% | 13.1% | 58.6% | 40.7% | 27.4% | 6.8% | 1.3% | - | $21.5B | VS | |
$ROST ROSS STORES, INC. | 67 | 63 | 55 | 83 | 25.2x | 16.5x | 34.8% | 13.3% | 28.0% | 11.6% | 9.1% | 10.4% | 1.0% | 26.0x | $51.6B | VS | |
$PZZA PAPA JOHNS INTERNATIONAL INC | 42 | 51 | 51 | 21 | 15.9x | 8.0x | -9.7% | 7.4% | 27.0% | 6.3% | 3.2% | 0.1% | 3.9% | - | $1.5B | ||
| SECTOR BENCH | - | - | - | - | - | 21.4x | 9.1x | 8.9% | 2.9% | 36.2% | 3.9% | 1.6% | 3.8% | 0.0% | 0.6x | - | REF |
PAPA JOHNS INTERNATIONAL INC (PZZA) receives a "Reduce" rating with a composite score of 41.9/100. It ranks #3294 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Direct cash return
Robert M. Lynch
Chief Executive Officer
Labor Force
12,000
51
31
53
Audit Verdict: Lower quality and stability scores may indicate governance concerns.
No recent insider transactions available for PZZA
Lagging peers — losers tend to keep underperforming
Fair valuation relative to peers
Average quality profile
Average volatility — neutral timing signal
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Retail Trade sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for PZZA.
View All RatingsConservative accounting — High cash conversion efficiency
Material decline in asset turnover efficiency detected
High margin volatility — erratic forensic earnings quality
| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 51 | 64 | -13DRAG |
| MOMENTUM | 21 | 14 | +7ALPHA |
| VALUATION | 51 | 56 | -5NEUTRAL |
| INVESTMENT | 31 | 36 | -5NEUTRAL |
| STABILITY | 53 | 57 | -4NEUTRAL |
| SHORT INT | 43 | 41 | +2NEUTRAL |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC 2.1% vs WACC 7.6% (spread -5.5%)
GM 27% vs sector 36%, OM 6% vs sector 4%
Capital turnover 0.74x
Rev growth 0%, 10yr history
Interest coverage N/A, Net debt/EBITDA 42.7x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
PAPA JOHNS INTERNATIONAL INC receives a Reduce rating from our analysis, with a composite score of 41.9/100 and 2 out of 5 stars, ranking #3294 out of 7,333 stocks. PZZA's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
With a quality score of 51/100, PZZA shows adequate but unremarkable business quality. The company reports a return on equity of -9.7% (sector avg: 8.9%), gross margins of 27.0% (sector avg: 36.2%), net margins of 3.2% (sector avg: 1.6%). This suggests the company generates acceptable returns but may lack the competitive positioning or operational efficiency to stand out from peers.
PZZA's value score of 51/100 indicates the stock is fairly valued based on its current fundamentals. Key valuation metrics include a P/E ratio of 15.87x, an EV/EBITDA of 7.98x. At this level, neither a clear bargain nor overpriced, the stock's attractiveness depends more on forward growth expectations and qualitative factors.
PAPA JOHNS INTERNATIONAL INC's investment score of 31/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of 0.1% vs. a sector average of 3.8% and a return on assets of 7.4% (sector: 2.9%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
PAPA JOHNS INTERNATIONAL INC is experiencing notably weak momentum with a score of just 21/100. The stock has underperformed its peers and is trending below major moving averages. Revenue growth stands at 0.1% year-over-year, while a beta of 0.74 reflects its sensitivity to broader market moves. While deep momentum weakness can occasionally present value opportunities, it often reflects deteriorating fundamentals or structural headwinds that may persist.
With a stability score of 53/100, PZZA exhibits average financial resilience. Key stability metrics include a beta of 0.74. While the balance sheet is not a major concern, the stock is subject to typical market volatility and may experience sharper drawdowns during risk-off episodes.
The short interest score of 43/100 for PZZA suggests somewhat elevated bearish positioning by institutional traders. Specific risk factors include small-cap liquidity risk. With a $1.5B market cap (small-cap), PAPA JOHNS INTERNATIONAL INC may experience above-average volatility. Investors should consider whether the short thesis has merit or if it creates a potential short-squeeze opportunity.
PZZA pays a solid dividend yield of 3.9%, contributing an income component to total returns. This moderate yield suggests a balance between returning capital to shareholders and retaining earnings for reinvestment — a common profile among quality compounders.
PAPA JOHNS INTERNATIONAL INC is a small-cap company in the Retail Trade sector, ranked #0 of 50 in its sector (100th percentile) and #3294 of 7,333 overall (55th percentile). Key comparisons include ROE of -9.7% trailing the 8.9% sector median and operating margins of 6.3% above the 3.9% sector average. This top-quartile standing reflects exceptional competitive strength relative to Retail Trade peers.
While PZZA currently exhibits a REDUCE profile, superior opportunities exist within the RETAIL TRADE sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
View Top Retail Trade Alpha →Quant Factor Profile
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Improvement in Momentum (21) would have the largest impact on the composite score.
EV/EBITDA 12% BELOW SECTOR MEDIAN (FAVORABLE)
ROE 209% BELOW SECTOR MEDIAN
Gross Margin 25% BELOW SECTOR MEDIAN
AUDIT DATA AS OF SEP 28, 2025 (Q2 FY2025)
We rate PAPA JOHNS INTERNATIONAL INC (PZZA) as a Reduce with a composite score of 41.9/100 at a current price of $34.30. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.
The rating is primarily driven by strength in stability (53th percentile) and quality (51th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (21th percentile) and investment (31th percentile) tempers our overall conviction. We assign a No Moat rating (20/100), Low uncertainty, and Poor capital allocation.
Key items to watch: momentum to confirm whether the current price trend has legs. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
PAPA JOHNS INTERNATIONAL INC holds a top-quartile position (#0 of 50) within the Retail Trade sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 41.9/100 places it at rank #3294 in our full 7,333-stock universe. At $1.5B in market capitalization, PAPA JOHNS INTERNATIONAL INC is a small-cap player in the Retail Trade space, which limits certain scale advantages but may allow for more agile strategic execution.
Revenue is growing at 0%, though momentum at the 21th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.
The margin cascade tells an important story: gross margins of 27% (-9.2pp vs sector) narrow to operating margins of 6% (+2.4pp vs sector) and net margins of 3.2%, yielding a gross-to-net conversion rate of 12%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.
At a current price of $34.30, PAPA JOHNS INTERNATIONAL INC is trading near fair value based on current fundamentals. Our value factor score of 51/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.
The stock currently trades at a P/E of 15.9x (a 26% discount to the sector median of 21.4x), EV/EBITDA of 8.0x (near the sector median), P/S of 0.5x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.
A 3.91% dividend yield provides income while you wait, and dividends historically account for a significant portion of total equity returns.
The Reduce rating (composite 41.9/100) reflects multi-factor weakness, and historically, stocks in this scoring range have underperformed the market by a meaningful margin.
Weak momentum (21th percentile) suggests institutional selling pressure and unfavorable technical dynamics that may persist.
We assign a Low uncertainty rating to PAPA JOHNS INTERNATIONAL INC. The company exhibits strong financial stability with a beta of 0.74, and a stability factor in the 53th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.
We identify no major risk factors at this time. The company's stability factor sits at the 53th percentile with quality at the 51th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.
Key risk mitigants include: a 3.91% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.
We rate PAPA JOHNS INTERNATIONAL INC's capital allocation as Poor. Key concerns include low returns on equity (-9.7%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — PAPA JOHNS INTERNATIONAL INC significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.
Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.
In summary, PAPA JOHNS INTERNATIONAL INC receives a Reduce rating with a composite score of 41.9/100 (rank #3294 of 7,333). Our quantitative framework assigns a No Moat (20/100, trend: stable), Low uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 42/100.
Our analysis does not support a constructive view on PAPA JOHNS INTERNATIONAL INC at this time. The combination of limited competitive advantages, low uncertainty, and poor capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We do not assign PAPA JOHNS INTERNATIONAL INC a meaningful economic moat, scoring 20/100 on our composite assessment. The ROIC-WACC spread of -5.5% is the primary signal of economic value creation. Current fundamentals do not demonstrate the kind of durable competitive advantages — such as superior returns on invested capital, margin superiority, or reinvestment efficiency — that would protect the company from competitive erosion over the long term. The highest-scoring pillar, margin superiority, reached only 6.6/20.
The strongest moat sources are margin superiority (6.6/20) and growth durability (6.2/20). GM 27% vs sector 36%, OM 6% vs sector 4%. Rev growth 0%, 10yr history. These pillars form the core of PAPA JOHNS INTERNATIONAL INC's competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include reinvestment efficiency (0.9/20) and economic value creation (1.5/20). Capital turnover 0.74x. Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect PAPA JOHNS INTERNATIONAL INC's moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers are not clearly identifiable from current fundamentals. This may reflect a company in transition, a cyclical downturn, or structural challenges in the business model. We assign a quality factor of 51/100 which provides some comfort regarding earnings sustainability.
The margin profile shows gross margins of 27%, operating margins of 6%, net margins of 3.2%. Return metrics include ROE of -9.7% and ROA of 7.4%. Relative to the Retail Trade sector, gross margins are 9.2 percentage points below the sector median of 36%, and ROE of -9.7% compares to a sector median of 8.9%.
The balance sheet reflects a dividend yield of 3.91%, revenue growth of 0%. Overall balance sheet health is adequate for the current business environment.
Above 50MA
37.18%
Net New Highs
+51081
PZZA, SG and SHAK gear up for Q4 results as value deals, digital push and cost pressures shape restaurant sector performance.
Papa John's received an all-cash takeover offer of $65 per share from TriArtisan Capital Advisors, valuing the company at $2.7 billion. The offer highlights the company's potential for turnaround, driven by strong international growth and strategic operational improvements.
Private-equity firm Apollo Global Management made a $64 per-share buyout bid for Papa John's, valuing the pizza chain at approximately $3 billion. The offer represents a potential 21% upside and validates the company's ongoing turnaround efforts under new CEO Todd Penegor.
Irenic Capital Management LP significantly reduced its Papa John's International position by approximately 70%, selling 748,592 shares in Q4 and retaining only 325,108 shares valued at $12.5 million. The stake now represents just 0.8% of the fund's AUM, dropping out of its top five holdings. Papa John's stock has underperformed the market, declining 30.7% over the past year while the S&P 500 gained 16.4%, amid struggling North American same-store sales.
The restaurant industry faced significant challenges throughout 2025 as rising dining costs and declining customer traffic forced major chains to close hundreds of locations. Starbucks shuttered ~500 North American cafes, Denny's closed 70-90 units, Papa John's closed 173 locations globally, Wendy's closed hundreds under 'Project Fresh,' and other major chains including Jack-In-The-Box, Bloomin' Brands, Noodles & Co, and Darden Restaurants also announced substantial closures as part of cost-cutting and restructuring efforts.