PZZA
Papa John's International, Inc.
$30.01
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 26.6% below fair value
You pay
$30.01
Bear
$33.69
Fair
$40.91
Bull
$48.13
Bear
$33.69
+12.3%
$2.48 × 14x P/E
Fair
$40.91
+36.3%
$2.48 × 17x P/E
Bull
$48.13
+60.4%
$2.48 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
12.1x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $38.00 from 32 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $40.91 per share.
Warnings
The company's reported profits differ from official accounting profits by 176%. Check what costs are being left out of the adjusted number.
The company pays out 204% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $81.59 (above our primary estimate by 94%). Large gaps may signal the dividend doesn't reflect full earning power.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples