As of June 15, 2025, Papa John's International Inc's estimated intrinsic value ranges from $101.01 to $174.15 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $157.57 | +212.5% |
| Discounted Cash Flow (5Y) | $126.96 | +151.8% |
| Dividend Discount Model (Multi-Stage) | $101.01 | +100.3% |
| Dividend Discount Model (Stable) | $174.15 | +245.4% |
| Earnings Power Value | $120.45 | +138.9% |
Is Papa John's International Inc (PZZA) undervalued or overvalued?
With the current market price at $50.42, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Papa John's International Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.47 | 0.58 |
| Cost of equity | 6.0% | 8.1% |
| Cost of debt | 4.9% | 4.9% |
| Tax rate | 18.6% | 19.8% |
| Debt/Equity ratio | 0.47 | 0.47 |
| After-tax WACC | 5.4% | 6.8% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $127 | $4,898M | 84.0% |
| 10-Year Growth | $158 | $5,900M | 71.1% |
| 5-Year EBITDA | $55 | $2,527M | 69.1% |
| 10-Year EBITDA | $83 | $3,466M | 50.7% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $281M |
| Discount Rate (WACC) | 6.8% - 5.4% |
| Enterprise Value | $4,156M - $5,214M |
| Net Debt | $742M |
| Equity Value | $3,414M - $4,473M |
| Outstanding Shares | 33M |
| Fair Value | $104 - $137 |
| Selected Fair Value | $120.45 |
| Metric | Value |
|---|---|
| Market Capitalization | $1651M |
| Enterprise Value | $2392M |
| Trailing P/E | 5.71 |
| Forward P/E | 12.99 |
| Trailing EV/EBITDA | 6.45 |
| Current Dividend Yield | 367.50% |
| Dividend Growth Rate (5Y) | 8.94% |
| Debt-to-Equity Ratio | 0.47 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $47.27 |
| Discounted Cash Flow (5Y) | 25% | $31.74 |
| Dividend Discount Model (Multi-Stage) | 20% | $20.20 |
| Dividend Discount Model (Stable) | 15% | $26.12 |
| Earnings Power Value | 10% | $12.04 |
| Weighted Average | 100% | $137.38 |
Based on our comprehensive valuation analysis, Papa John's International Inc's weighted average intrinsic value is $137.38, which is approximately 172.5% above the current market price of $50.42.
Key investment considerations:
Given these factors, we believe Papa John's International Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.