Latest news with #PTLO
Yahoo
02-06-2025
- Business
- Yahoo
3 Inflated Stocks Skating on Thin Ice
The stocks featured in this article are seeing some big returns. Over the past month, they've outpaced the market due to new product launches, positive news, or even a dedicated social media following. But not every company with momentum is a long-term winner, and plenty of investors have lost money betting on short-term fads. All that said, here are three stocks getting more buzz than they deserve and some you should buy instead. One-Month Return: +31.3% Born out of a failed voice recognition startup by founder Spenser Skates, Amplitude (NASDAQ:AMPL) is data analytics software helping companies improve and optimize their digital products. Why Are We Hesitant About AMPL? Customers had second thoughts about committing to its platform over the last year as its average billings growth of 8.7% underwhelmed Historical operating margin losses point to an inefficient cost structure Poor free cash flow margin of 1.2% for the last year limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends Amplitude is trading at $12.39 per share, or 4.7x forward price-to-sales. To fully understand why you should be careful with AMPL, check out our full research report (it's free). One-Month Return: +15% Begun as a Chicago hot dog stand in 1963, Portillo's (NASDAQ:PTLO) is a casual restaurant chain that serves Chicago-style hot dogs and beef sandwiches as well as fries and shakes. Why Is PTLO Not Exciting? Disappointing same-store sales over the past two years show customers aren't responding well to its menu offerings and dining experience Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens Portillo's stock price of $12.02 implies a valuation ratio of 32.9x forward P/E. Read our free research report to see why you should think twice about including PTLO in your portfolio, it's free. One-Month Return: +40.4% Created through a settlement between NRG Energy and the California Public Utilities Commission, EVgo (NASDAQ:EVGO) is a provider of electric vehicle charging solutions, operating fast charging stations across the United States. Why Does EVGO Worry Us? Historically negative EPS is a worrisome sign for conservative investors and obscures its long-term earnings potential Cash-burning tendencies make us wonder if it can sustainably generate shareholder value Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders At $4 per share, EVgo trades at 33.5x forward EV-to-EBITDA. If you're considering EVGO for your portfolio, see our FREE research report to learn more. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
- Business
- Yahoo
1 Restaurant Stock with Exciting Potential and 2 to Avoid
From fast food to fine dining, restaurants play a vital societal role. But the side dish is that they're quite difficult to operate because high inventory and labor costs generally lead to thin margins at the store level. This leaves little room for error if demand dries up, and it seems like the market has some reservations as the industry has tumbled by 7.2% over the past six months. This performance was discouraging since the S&P 500 held its ground. Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. Keeping that in mind, here is one resilient restaurant stock pinned to our Google Maps and two we're steering clear of. Market Cap: $16.55 billion Founded by two brothers in Michigan, Domino's (NYSE:DPZ) is a globally recognized pizza chain known for its creative marketing and fast delivery. Why Is DPZ Not Exciting? Lackluster 5.2% annual revenue growth over the last six years indicates the company is losing ground to competitors Projected sales growth of 5.8% for the next 12 months suggests sluggish demand Static operating margin over the last year shows it couldn't become more efficient Domino's is trading at $483.09 per share, or 27.1x forward P/E. Check out our free in-depth research report to learn more about why DPZ doesn't pass our bar. Market Cap: $804.2 million Begun as a Chicago hot dog stand in 1963, Portillo's (NASDAQ:PTLO) is a casual restaurant chain that serves Chicago-style hot dogs and beef sandwiches as well as fries and shakes. Why Does PTLO Worry Us? Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new restaurants Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of -0.2% for the last two years High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens Portillo's stock price of $12.51 implies a valuation ratio of 34.4x forward P/E. If you're considering PTLO for your portfolio, see our FREE research report to learn more. Market Cap: $6.71 billion Founded by Norman Brinker in Dallas, Brinker International (NYSE:EAT) is a casual restaurant chain that operates the Chili's, Maggiano's Little Italy, and It's Just Wings banners. Why Are We Positive On EAT? Same-store sales growth averaged 11.7% over the past two years, showing it's bringing new and repeat diners into its restaurants Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient Free cash flow margin increased by 4.2 percentage points over the last year, giving the company more capital to invest or return to shareholders At $151 per share, Brinker International trades at 16.3x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it's free. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
Yahoo
28-04-2025
- Business
- Yahoo
3 Reasons to Avoid PTLO and 1 Stock to Buy Instead
Portillo's stock price has taken a beating over the past six months, shedding 20.5% of its value and falling to $10.59 per share. This might have investors contemplating their next move. Is there a buying opportunity in Portillo's, or does it present a risk to your portfolio? Check out our in-depth research report to see what our analysts have to say, it's free. Despite the more favorable entry price, we're swiping left on Portillo's for now. Here are three reasons why PTLO doesn't excite us and a stock we'd rather own. Begun as a Chicago hot dog stand in 1963, Portillo's (NASDAQ:PTLO) is a casual restaurant chain that serves Chicago-style hot dogs and beef sandwiches as well as fries and shakes. With $710.6 million in revenue over the past 12 months, Portillo's is a small restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale. On the bright side, it can grow faster because it has more white space to build new restaurants. Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king. Portillo's broke even from a free cash flow perspective over the last two years, giving the company limited opportunities to return capital to shareholders. As long-term investors, the risk we care about most is the permanent loss of capital, which can happen when a company goes bankrupt or raises money from a disadvantaged position. This is separate from short-term stock price volatility, something we are much less bothered by. Portillo's $596.2 million of debt exceeds the $22.88 million of cash on its balance sheet. Furthermore, its 5× net-debt-to-EBITDA ratio (based on its EBITDA of $104.8 million over the last 12 months) shows the company is overleveraged. At this level of debt, incremental borrowing becomes increasingly expensive and credit agencies could downgrade the company's rating if profitability falls. Portillo's could also be backed into a corner if the market turns unexpectedly – a situation we seek to avoid as investors in high-quality companies. We hope Portillo's can improve its balance sheet and remain cautious until it increases its profitability or pays down its debt. Portillo's isn't a terrible business, but it doesn't pass our quality test. Following the recent decline, the stock trades at 33.7× forward price-to-earnings (or $10.59 per share). Beauty is in the eye of the beholder, but our analysis shows the upside isn't great compared to the potential downside. We're pretty confident there are superior stocks to buy right now. We'd recommend looking at the Amazon and PayPal of Latin America. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
Yahoo
17-04-2025
- Business
- Yahoo
Portillo's Inc. (PTLO): A Bull Case Theory
We came across a bullish thesis on Portillo's Inc. (PTLO) on Substack by Andrew Wagner. In this article, we will summarize the bulls' thesis on PTLO. Portillo's Inc. (PTLO)'s share was trading at $11.84 as of April 16th. PTLO's trailing and forward P/E were 25.74 and 28.17 respectively according to Yahoo Finance. Copyright: bhofack2 / 123RF Stock Photo Portillo's (PTLO), the iconic fast-casual chain best known for its 'Chicago-style' offerings, has become interesting following a steep 80% decline from its post-IPO highs. Founded in 1963 as a humble hot dog stand near Chicago, the brand has grown into a beloved regional staple with 94 locations across 10 states—though more than half are still in Illinois. The company isn't selling discount or health-conscious food, but instead leans into a strategy of high-quality, abundant portions at fair prices. The experience is part of the product, and with recent shifts in strategy, the next chapter for Portillo's may look vastly different than its past. Activist investor Engaged Capital entered the scene in 2024 with a roughly 10% stake, catalyzing what appears to be a pivotal transformation for the business. Engaged has pushed for smarter restaurant builds and a more efficient operating model, including a switch from buying land to leasing it, which drastically reduces upfront capital needs. This shift complements management's prior decision to transition from large, inefficient restaurants to smaller, more scalable formats—unlocking operating leverage and supporting a faster, more sustainable expansion strategy. That expansion is already underway. While Portillo's long-term goal is to reach over 900 restaurants in the next 20 years, the near-term strategy is focused on 'follow the customer.' This means building in markets where demand is already evident through its national 'Shop & Ship' program. Texas, which leads in these mail-order metrics, is a key target, with 75% of new openings this year set in the state. Portillo's is building out clusters in Sunbelt regions, aiming to build brand awareness and operational efficiency quickly. With smaller locations, drive-through-only formats, and an evolving menu for new markets, the company is maximizing throughput while tailoring the experience. Operational tweaks don't stop there. Recent and planned initiatives include a simplified menu, faster drive-through service, self-ordering kiosks, and a loyalty program to retain and grow the customer base. These changes help to address the brand's biggest challenge—scaling outside of Chicagoland while maintaining the magic that made it iconic. Management projects annual unit growth of 12% to 15%, which may seem modest compared to hyper-growth tech, but is prudent given the company's balance sheet and the capital intensity of restaurant builds. Financial performance is showing signs of strength despite macro headwinds. In 2024, company-wide cash flow from operations surged nearly 40%, thanks to a combination of solid same-store sales and new unit openings. This stands in contrast to an industry grappling with inconsistent performance, inflationary pressures, and recession fears. Portillo's is not immune—wage and input costs are rising, and a downturn could slow development—but its model has shown resilience. Still, expansion comes with risks. The Chicago-area locations generate sales roughly double those in other markets, a level unlikely to be matched as the company scales. That means national expansion won't be a carbon copy of its Illinois operations. Sales volumes in the Sunbelt should resemble current non-Chicagoland stores, and Portillo's will need to keep expectations measured as it grows. What makes the investment case compelling now is the combination of a powerful brand and a roadmap for operational transformation. The involvement of Engaged Capital is a significant signal; activist interest rarely emerges without a credible path to unlocking value. The recent addition of Chipotle's President and Chief Strategy Officer to Portillo's board underscores this shift, suggesting future changes will be driven by experienced hands. More board reshuffling is expected, aligning leadership with the company's long-term growth ambitions. Portillo's isn't the fastest grower or the strongest operator today, but that's not the point. The investment thesis hinges on an evolving narrative: a beloved but regionally constrained brand refining its operations, led by an activist-driven strategy and a reconstituted board. Historical performance, while helpful context, doesn't reflect the direction the company is heading. If management executes, Portillo's has the potential to become a national powerhouse. Portillo's Inc. (PTLO) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held PTLO at the end of the fourth quarter which was 12 in the previous quarter. While we acknowledge the risk and potential of PTLO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PTLO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. 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