Papa John's (NASDAQ:PZZA) faced significant challenges going into the last quarter, including easing lockdown restrictions and reopening dining rooms opening up competitive options for consumers. The latest quarter numbers proved Papa John's was up to the challenge as it delivered beats on earnings and revenue. Such wins delivered substantial gains, as Papa John's was up over 7% going into this morning's trading and putting a new 52-week high potentially in sight amid trading volume that was substantially higher than average.
A Fully-Loaded Earnings Report
Papa John's earnings and revenue reports handily beat expectations. The company delivered earnings of $0.90 per share against Refinitiv estimates of $0.56 per share. Revenue was also above estimates, with the company bringing in $511.7 million against an expected $471 million. Revenue figures also represented a substantial gain against the same time last year, with that quarter's figures coming in at $409.9 million.
Same-store sales were responsible for much of the company's gains, with North American same-store sales up 26.2%, and international same-store sales up a similar 23.2%. Both turned out above projections, with expectations for North American same-store rates coming in at 14.6% and international same-store rates coming in at 17.4%.
Rob Lynch, Papa John's CEO, pointed to a plan established back in 2019 as the primary reason behind the company's growth. The plan called for increased focus on product innovation and accompanying development, as well as operational improvements and improvement in the company's corporate culture. Of particular note in Lynch's remarks was Papa John's rollout of the Epic Stuffed Crust pizza, which represented a “premium” pizza that increased the average ticket price.
Further releases are set to come, as Lynch noted that new protect testing continues and commodity costs prove to have less impact than expected. The company does have some concern about supply availability and labor shortage issues, points that have been seen weighing on much of the restaurant sector lately. A Papa John's in Monroe, Michigan recently closed its doors altogether due to trouble finding help.
What do Financial Analysts Say about PZZA Stock?
Interest among financial analysts in PZZA stock has been on the rise over the last six months, though there are signs interest has plateaued based on our latest research. Six months ago, Papa John's had 11 “buy” ratings and five “hold” ratings to its credit. Three months ago, that shifted to three “hold” ratings, which remained the case up to this very day, and 13 “buy” ratings, which varied only slightly until today.
The consensus price target has also been on a steady rise, going from $94.25 six months ago to $103.19 today. With Papa John's currently trading at $101.62 per share as of this writing, the higher-end targets look to be the ones to watch as Papa John's retests its 52-week high of $110.33.
Recent analyst evaluations suggest improvements nearly across the board. For 2021 so far, there have been eight analyst projections established, and of these, seven feature raised price targets. The only analyst that didn't actively raise prices, BMO Capital Markets, merely initiated coverage, establishing a price target of $105.