Papa Johns Pizza | PZZA | Long at $37.00

130
Warren Buffett goes for Dominos ( DPZ ), but I'm here for Pappa Johns NASDAQ:PZZA.

Pros:
  • Earnings are forecast to grow 10.92% per year
  • Revenue grew from $1.8 billion in 2020 to $2.1 billion through Q3 of 2024 - expected to continue to rise through 2027
  • Free cash flow expected to improve
  • 5.1% dividend
  • A lot of options awarded to insiders in 2024 and limited selling
  • Technological advancements in AI/ordering/processing may reduce long-term costs
  • Technical analysis shows stock may be coming out of a downtrend in low $30's (but exercise caution - very early)


Cons:
  • Debt is not well covered by operating cash flow
  • Dividend is not well covered by free cash flows
  • May have some near-term struggles due to weakening economy
  • Technical analysis shows possible drop to the $20's if bad earnings/outlook are revealed (another personal buying opportunity)


While there may be some near-term economic headwinds, I like the stock and the future of companies like DPZ and PZZA as AI is integrated to reduce costs. Thus, at $37.00, PZZA is in a personal buy zone.

Targets
  1. $45.00
  2. $50.00
  3. $60.00
  4. $100.00+ (very long-term outlook to close the existing price gaps on the daily chart)

Trade active
Targets #1 and 2 reached for a 21.6% and 35.1% gain.

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