What Really Sunk Papa John’s Valuation Multiple
Papa John’s lower-than-expected 4Q16 sales and SSSG appear to have made investors skeptical of future earnings.
Of the seven analysts that follow Papa John’s, three have issued a “buy” recommendation, while four have a “hold.”
In 4Q16, Papa John’s posted EBIT (earnings before interest and tax) of $41.2 billion, which represents an EBIT margin of 9.4%.
Papa John’s posted an EPS of $0.88 in 4Q16. Removing special items, the adjusted EPS stood at $0.69.
For 4Q16, Papa John’s (PZZA) posted SSSG of 3.8% in North America, as compared to the analysts’ estimate of 5.9%.
By the end of 4Q16, Papa John’s was operating 5,097 restaurants, with 744 company-owned restaurants and 4,353 franchised.
In 4Q16, Papa John’s posted revenue of $439.6 million, as compared to the analysts’ estimate of $446.9 million.
Papa John’s, a Kentucky-based takeout and pizza delivery restaurant chain, posted 4Q16 EPS of $0.88 on revenues of $439.6 million.
On February 22, 2017, Home Depot (HD) stock was trading at $145.25. This price may have already factored in the estimates we’ve discussed in this series.
Home Depot’s better-than-expected 4Q16 earnings and positive outlook appear to have increased investors’ confidence, leading to a rise in the company’s stock price and PE.
In 4Q16, Home Depot (HD) raised its dividends 29%, from $0.69 to $0.89. In 2016, the company paid total dividends of $2.96, a rise of 25.4% from $2.36 in 2015.
Now that we’ve discussed Home Depot’s 4Q16 revenue, sources of revenue, and margins, let’s take a look at its 4Q16 EPS (earnings per share) and estimated EPS for 2017.
In 4Q16, Home Depot (HD) posted a gross margin, EBITDA margin, and net margin of 34.0%, 15.4%, and 7.9%, respectively.
Analysts expect Home Depot (HD) to post revenue of $98.8 billion in 2017, a rise of 4.4% from its 2015 revenue of $94.6 billion.
On a monthly basis, Home Depot posted same-store sales growths of 5.7% in November, 7.1% in December, and 4.7% in January.
In 4Q16, Home Depot posted revenue of $22.2 billion, a rise of 5.8% compared to its revenue of $21.0 billion in 4Q15. In 2016, the company’s revenue totaled $94.6 billion.
Home Depot (HD) is the largest home improvement retailer in the world, with 2,278 stores spread across the United States, Canada, and Mexico.
According to the most recent data compiled by Thomson Reuters, 30% of analysts covering Tesla (TSLA) have given the stock “buy” recommendations.
As of February 22, 2017, Tesla’s forward EV-to-EBITDA multiple was at 42.2x.
According to Tesla’s 4Q shareholder letter, battery cell production at the Gigafactory has already started for its energy storage products.