TSX

Pizza Pizza Royalty Corp.

PZA.TO•Consumer Cyclical•Restaurants
Current Price
$10.56
Today's Change
-0.52%
Market Cap
$261.45M
Volume
17.93K

💡 Quick Take

Pizza Pizza Royalty Corp. operates quick service restaurants in Canada under the Pizza Pizza and Pizza 73 brands. The company boasts impressive financial metrics, including a gross margin of 100% and an EBITDA margin of 98.2%, indicating strong profitability. However, its return on equity (ROE) and return on assets (ROA) are relatively low at 2.5% and 2.0%, suggesting potential inefficiencies in generating returns. Despite high margins, the market cap of $261.45M may indicate undervaluation, warranting further investigation into growth prospects and market positioning.

Based on 27 data points⚠️Not financial advice

📊 Key Metrics

52 Week High$16.73
52 Week Low$10.10
Avg Volume106.14K
Beta0.63
Shares Outstanding24.62M

🔥 Valuation

Market Cap$261.45M
Enterprise Value$400.29M
P/E Ratio11.51
EV/EBITDA10.03x
Dividend Yield6.18%

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🚩 Red Flags

🟠

Margin Compression

Gross profit margin declined from 100.0% to 51.2% year-over-year, suggesting pricing pressure or rising input costs are squeezing profitability.

🟠

High Debt Load

Debt of $46.8M is 349.2x the company's cash position of $134K.

🌟 Opportunities

🚀

Operating margin of 98.2% demonstrates excellent operational efficiency.

💪

Strong gross margin of 51.2% reflects healthy unit economics.

🚀

Excellent operating cash flow margin of 76.5% indicates high-quality earnings.

💪

Strong free cash flow margin of 76.5% provides substantial resources for dividends, buybacks, or reinvestment.

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