Papa John's (PZZA) Stock Trades Up, Here Is Why

What Happened:

Shares of fast-food pizza chain Papa John’s (NASDAQ:PZZA) jumped 5.5% in the afternoon session after speculations that the company could be acquired. Gordon Haskett's Don Bilson noted in a research report that a jet owned by one of PZZA's largest shareholders, 3G Capital, made a trip to the company's (Papa John's) headquarters.

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What is the market telling us:

Papa John's’s shares are not very volatile than the market average and over the last year have had only 3 moves greater than 5%. In context of that, today’s move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 6 months ago, when the stock gained 8.6% on the news that the company reported fourth-quarter results that beat analysts' gross margin and EPS estimates. 

On the other hand, its revenue slightly missed analysts' expectations. International revenue beat, while North America revenue drove the narrow miss. The company opened 89 units during the quarter (36 in North America and 53 internationally), demonstrating the focus on driving growth as it explores new markets. Looking ahead, no guidance was given in the earnings release. Overall, this was a really good quarter that should please shareholders.

Papa John's is down 35.8% since the beginning of the year, and at $48.66 per share it is trading 37.7% below its 52-week high of $78.10 from September 2023. Investors who bought $1,000 worth of Papa John's’s shares 5 years ago would now be looking at an investment worth $1,110.

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