10Y annualized return is
average
at 9.1% per year
YUM has met or exceeded earnings expectations in
all
recent quarters (0/0)
Strong Price-to-Sales Ratio
Healthy Profit Margins
Adequate Liquidity Ratios
Strong Interest Coverage
🏆 Strong Brand Portfolio
💻 Digital Transformation
🚀 Promising Growth in Key Markets
🔧 Technology and Innovation Pipeline
High Price-to-Earnings Ratio
Negative Price-to-Book Ratio
Negative Return on Equity
High Debt Levels
📉 International Market Challenges
⏳ Uncertainty in Unit Growth
YUM! Brands demonstrates strong business quality through its resilient brand portfolio and digital transformation initiatives. However, it faces challenges in international markets and short-term unit growth uncertainty. Future prospects are bolstered by promising growth in key markets and ongoing technological advancements, providing a solid foundation for long-term success.
Analysis Date: February 6, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Yum! Brands, Inc. is a company that runs popular fast-food restaurants around the world. They own well-known brands like KFC, Taco Bell, Pizza Hut, and The Habit Burger Grill. Each of these restaurants specializes in different types of food, such as fried chicken, pizza, tacos, and burgers. Yum! Brands focuses on making these meals quickly and conveniently for customers in many countries.
Core Products
Business Type
Business to Consumer
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$202.88
Current Market Price: $146.31
IV/P Ratio: 1.39x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
28.000000000000004%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for YUM
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (28.05)
P/B ratio ≤ 1.5 (-5.45)
Current ratio ≥ 2.0 (1.47x)
Long-term debt < Net current assets (20.21x)
Margin of safety (28.000000000000004%)
YUM does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
-19.36%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-29)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
47.48%
Higher values indicate better efficiency in production
TTM (as of 2025-04-29)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
19.68%
Higher values indicate better overall profitability
TTM (as of 2025-04-29)
The gross profit margin of 47.48% and net profit margin of 19.68% show that the company is effective at converting sales into profits.
A return on equity (ROE) of -19.36% indicates that the company is currently losing money relative to shareholders' equity, which is a significant concern for investors.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
-1.61x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.47x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
The current ratio of 1.47 and quick ratio of 1.47 indicate that the company has sufficient short-term assets to cover its liabilities, which is a positive sign for liquidity.
An interest coverage ratio of 4.87 suggests that the company can easily meet its interest obligations, indicating good financial stability.
The debt-to-equity ratio of -1.61 and debt-to-assets of 1.83 indicate excessive leverage, which poses a risk to the financial health of the company.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
YUM! Brands has a diverse and iconic brand portfolio including Taco Bell, KFC, and Pizza Hut, which provides resilience and competitive advantages in various markets. The company reported a full year core operating profit growth of 8%, showcasing the effectiveness of its multi-brand strategy.
The introduction of Byte by Yum! integrates various proprietary software solutions, enhancing operational efficiency and driving digital sales growth by approximately 15% in 2024. This initiative positions YUM! ahead of competitors by providing a seamless digital experience for consumers.
Despite overall strength, YUM! faced a 12% decline in system sales in certain international markets impacted by geopolitical tensions, which indicates vulnerability in global operations.
KFC International and Taco Bell US are expected to continue their strong performance, with Taco Bell gaining market share and KFC seeing recovery in previously impacted regions. The focus on new product offerings and digital engagement supports future revenue growth.
YUM!'s commitment to technology, particularly through the Byte platform, is expected to enhance customer engagement and operational efficiencies. The use of AI-driven marketing for personalized consumer experiences is a notable innovation that can drive future growth.
The anticipated closures of underperforming units in Turkey and other markets may impact short-term unit growth, creating uncertainty in achieving long-term growth targets.
