Papa John Is Bearish on Papa John’s
Pizza chain founder takes to Seeking Alpha to critique stock
The managerial food fight at Papa John’s International PZZA -1.25% has become even saucier.
It isn’t every day that a former executive takes to the internet to critique his ex-employer’s performance. But founder “Papa” John Schnatter, who resigned from the company amid a slew of controversy in 2018, did just that. He is bearish on the stock, as he wrote in an article posted to Seeking Alpha on Wednesday afternoon.
Like many investors, Mr. Schnatter is concerned about high valuations: Papa John’s stock trades at about 56 times last year’s earnings. He also noted other risk factors such as increased competition from independent restaurants as pandemic restrictions ease, as well as higher food prices.
There is a little more spice to this bear call, however: Other headwinds the company faces, as Mr. Schnatter sees it, include “lackluster pizza quality” and “limited pizza experience among leadership.”
Of late, investors seem to agree with Mr. Schnatter’s view of the stock. Shares are down nearly 25% since September. But current Chief Executive Rob Lynch might have a rejoinder: Even with that selloff, shares have risen 60% since Mr. Schnatter stepped down as chairman.