Potbelly Corp (PBPB) Rated Outperform Following Q2 Results


In a research note reported yesterday, William Blair analyst Sharon Zackfia maintained an Outperform rating on Potbelly Corp (NASDAQ:PBPB) despite second quarter results being lower than expectations. No price target was assigned.

Zackfia noted, “Same-store sales declined 1.6% against a 3.0% comparison, below our and the consensus estimates for an approximate 1% increase, inclusive of a 70-basis-point penalty tied to the shift of Easter into April. We estimate an average check gain of roughly 1.5% was more than offset by a 2.4% traffic decline in the quarter, adjusting for the Easter shift and worsening from an estimated 0.7% traffic decline in the first quarter after adjusting for weather and the Easter shift”.

Zackfia continued, “At just over $12 in the aftermarket, Potbelly Corp (NASDAQ:PBPB)’s shares trade at just over 8 times our 2015 EBITDA estimate. While we are disappointed by the company’s same-store sales struggles, we also believe new 2014 guidance has been set at achievable levels, which, combined with a high short interest, should provide some support to the stock in the near term. Although we do not believe a silver bullet initiative exists to regain positive traffic growth, we see the potential for upcoming easier comparisons (beginning in earnest in October) to bolster sales trends”.

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According to TipRanks.com, which measures analysts and bloggers success rate based on how their calls perform, analyst Sharon Zackfia currently has a one-year average return of 34.3% and a 67% success rate. Zackfia has an average return of -18.3% when recommending Potbelly Corp (NASDAQ:PBPB), and is ranked #338 out of 3211 analysts.