Introduction
After a dismal few years, Papa John's (PZZA) shares are flying high. Investors are excited about bad headlines fading, a new CEO being appointed, a famous brand ambassador, and the presence of an activist investor. Everything looks good, except the company's financial results, as it struggles to turn a profit, let alone get back to prior levels.
Like J.C. Penney (JCP) before it, Papa John's customers are not coming back. They have numerous choices and Papa's product is hardly unique. Even in an optimistic scenario of increasing margins, the stock has