February 22, 2024
Top 10 Stock Papa John's Hold Recommendation

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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 22, 2024
VALUE
VALUE	86
GROWTH
GROWTH	17
SAFETY
SAFETY	40
SENTIMENT
SENTIMENT	55
360° VIEW
360° VIEW	47

ANALYSIS: With an Obermatt 360° View of 47 (better than 47% 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 17, 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 40, meaning the company has a riskier financing structure than 60 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 47, Papa John's is worse than 53% 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 17) and the financing structure is on the risky side(Safety Rank of 40). 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

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Sentiment Strategy: Professional Market Sentiment for Papa John's positive

SENTIMENT METRICS	February 22, 2024
ANALYST OPINION
ANALYST OPINION	42
OPINIONS CHANGE
OPINIONS CHANGE	50
PRO HOLDINGS
PRO HOLDINGS	53
MARKET PULSE
MARKET PULSE	69
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	55

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 all but one indicator above average for Papa John's. Analyst Opinions are at a rank of 42 (worse than 58% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Papa John's. Even better, the Professional Investors rank is 53, meaning that professional investors hold more stock in this company than in 53% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 69, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 69% 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. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more

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Value Strategy: Papa John's Stock Price Value at the top

VALUE METRICS	February 22, 2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	52
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	33
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	83
DIVIDEND YIELD
DIVIDEND YIELD	84
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	86

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 52 which means that the stock price compared with what market professionals expect for future sales is lower than for 52% 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

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Growth Strategy: Papa John's Growth Momentum negative

GROWTH METRICS	February 22, 2024
REVENUE GROWTH
REVENUE GROWTH	41
PROFIT GROWTH
PROFIT GROWTH	16
CAPITAL GROWTH
CAPITAL GROWTH	54
STOCK RETURNS
STOCK RETURNS	27
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	17

ANALYSIS: With an Obermatt Growth Rank of 17 (better than 17% 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 three out of four indicators below average for Papa John's. Only Capital Growth has a good rank of 54, which means that currently professionals expect the company to grow its invested capital more than 16% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 41 which means that currently professionals expect the company to grow less than 59% of its competitors. Profit Growth with a rank of 16 and Stock Returns with a rank of 27 are also low (below 73% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 17, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Papa John's is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more

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Safety Strategy: Papa John's Debt Financing Safety below-average

SAFETY METRICS	February 22, 2024
LEVERAGE
LEVERAGE	5
REFINANCING
REFINANCING	61
LIQUIDITY
LIQUIDITY	71
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	40

ANALYSIS: With an Obermatt Safety Rank of 40 (better than 40% 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 61, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 61% of its competitors. Liquidity is also good at 71, meaning the company generates more profit to service its debt than 71% 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 40 (worse than 60% 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

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Combined financial peformance: Papa John's Below-Average Financial Performance

COMBINED PERFORMANCE	February 22, 2024
VALUE
VALUE	86
GROWTH
GROWTH	17
SAFETY
SAFETY	71
COMBINED
COMBINED	47

ANALYSIS: With an Obermatt Combined Rank of 47 (worse than 53% 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 17), and are riskily financed (Safety Rank of 40), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 47, 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 17) and risky financing practices (Obermatt Safety Rank of 40), 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

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