Papa John's (PZZA) Stock Forecast & Price Target

Papa John's International demonstrated a positive trend with international comparable sales growth of 3.2%, surpassing both internal and street estimates of 1.5%. The firm is experiencing sequential traffic gains and stronger brand perception, which, along with an increase in customer loyalty frequency, indicates a potential acceleration in performance in the second half of 2025. Despite ongoing margin pressures from food inflation and a value-driven mix, the company's improving comparable sales and rising brand health metrics contribute to a favorable long-term outlook.

Papa John's International experienced a decline in transaction comps of less than 1%, despite a 120 basis point sequential improvement, indicating challenges in driving consistent sales growth. Additionally, the company's average ticket fell approximately 2% year-over-year, adversely affected by changes in loyalty redemptions, a shift in pizza size preferences, and aggressive discounting strategies. Furthermore, significant pressure on margins was evident at company-owned units, with restaurant margins contracting approximately 550 basis points year-over-year, highlighting operational inefficiencies that could negatively impact profitability.