Potbelly Story

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PBPB -- USA Stock  

USD 4.97  0.07  1.43%

While some baby boomers are getting worried about consumer cyclical space, it is reasonable to go over Potbelly. What exactly are Potbelly shareholders getting in January? Is the firm valuation sustainable? Here I will cover a perspective on valuation of Potbelly to give you a better outlook on taking a position in this stock.
Published over three weeks ago
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The impact of current bullish trends on Potbelly (NASDAQ:PBPB)
The company currently holds 253.5 M in liabilities. Potbelly has a current ratio of 0.58, indicating that it has a negative working capital and may not be able to pay financial obligations when due. We provide trade recommendations to complement the recent expert consensus on Potbelly. Our dynamic recommendation engine exercises a multidimensional algorithm to analyze the firm's potential to grow using all technical and fundamental data available at the time.
We determine the current worth of Potbelly using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Potbelly based exclusively on its fundamental and basic technical indicators. By analyzing Potbelly's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Potbelly's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Potbelly. We calculate exposure to Potbelly's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Potbelly's related companies.

Potbelly Investment Alerts

Potbelly investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Potbelly performance across your portfolios.Please check all investment alerts for Potbelly

Potbelly Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Potbelly value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Potbelly competition to find correlations between indicators driving the intrinsic value of Potbelly.

How Potbelly utilizes its cash?

To perform a cash flow analysis of Potbelly, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Potbelly is receiving and how much cash it distributes out in a given period. The Potbelly cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Potbelly Net Cash Flow from Operations is projected to decrease significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at 37.64 Million

Exercise or conversion by Lecocq Daniel of 11878 shares of Potbelly subject to Rule 16b-3

Legal trades by Potbelly insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Potbelly insider trading alert for exercise of performance stock units by Lecocq Daniel, SVP Franchise & Corp Develop, on 6th of January 2021. This event was filed by Potbelly Corp with SEC on 2021-01-06. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

What is driving Potbelly Investor Appetite?

The entity reported the previous year's revenue of 318.17 M. Net Loss for the year was (50.3 M) with profit before overhead, payroll, taxes, and interest of 114 M.
 2011 2016 2017 2020 (projected)
Interest Expense134 K199 K124 K189.09 K
Gross Profit296.11 M301.38 M314.69 M307.97 M

Margins Breakdown

Potbelly profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Potbelly itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Potbelly profit margins.
Operating Margin(0.46)
EBITDA Margin6.95
Gross Margin35.76
Profit Margin(1.67)


Potbelly Invested Capital is somewhat stable at the moment. Also, Potbelly Free Cash Flow is decreasing over the last 5 years. The current value of Potbelly Free Cash Flow is 6,508,679.

Our take on today Potbelly slip

The downside variance is down to 12.4 as of today. Potbelly shows above-average downside volatility for the selected time horizon. We advise investors to inspect Potbelly further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Potbelly future alpha.

Our Final Take On Potbelly

Whereas other entities in the restaurants industry are either recovering or due for a correction, Potbelly may not be as strong as the others in terms of longer-term growth potentials. While some investors may not share our view, we believe that right now is not a good time to increase your holdings in Potbelly. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Potbelly.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Potbelly. Please refer to our Terms of Use for any information regarding our disclosure principles.

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