Investment Thesis
Papa John's International, Inc. (PZZA) is still reeling from the past PR blunders made by its founder. Domestic same-store sales have beenon the decline for more than a year. Operating margins have reached the lowest in more than a decade. More pressure on margins is likely in the years ahead as the company, in pursuit of lost market share in a highly competitive industry, steps up its expenditure on marketing and franchisee assistance. The above assumptions incorporated in a DCF model indicate an overvaluation of the stock, confirmed by relative valuation