Restaurant Brands International (QSR) AI Stock Analysis

• Market Cap: $31.14B
• Dividend Yield: 3.56%
• Average Volume (3M): 2.97M
• Price to Earnings (P/E): 26.0
• Beta (1Y): 0.29
• Revenue Growth: 21.80%
• EPS Growth: -34.35%
• Country: US
• Employees: 37,600
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 0.94
• Shares Outstanding: 327,801,850
• 10 Day Avg. Volume: 3,235,668
• 30 Day Avg. Volume: 2,974,968
• PEG Ratio: -1.27
• Price to Book (P/B): 6.69
• Price to Sales (P/S): 2.47
• P/FCF Ratio: 15.97
• Enterprise Value/Market Cap: 1.51
• Enterprise Value/Revenue: 5.16
• Enterprise Value/Gross Profit: 13.73
• Enterprise Value/Ebitda: 18.83
• 1Y Price Target: $75.73
• Price Target Upside: 10.59% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 20

• Rating: 72 Outperform
• Price Target: $73.00 ▲(6.60% Upside)

Restaurant Brands International's overall stock score of 72 reflects a stable financial performance with strong cash flow and operational efficiency, despite challenges in profitability and high leverage. The positive technical indicators and strong earnings call guidance further support the stock's potential, although valuation metrics suggest moderate attractiveness. The company's strategic focus on growth and cost management provides a positive outlook.

Positive Factors

Revenue Growth

Consistent sales growth across key segments like Tim Hortons and International indicates strong market demand and effective strategies, supporting long-term revenue expansion.

International Expansion

The expansion into Mexico with over 300 new Popeyes restaurants enhances global footprint, diversifies revenue streams, and strengthens competitive position in the fast-food industry.

Operational Efficiency

High EBIT margin demonstrates effective cost management and operational efficiency, which can sustain profitability and provide a buffer against economic fluctuations.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk during economic downturns, potentially impacting long-term financial stability and growth opportunities.

Profit Margin Pressure

Declining profit margins indicate pressure on profitability, which could affect the company's ability to reinvest in growth and maintain competitive pricing strategies.

Commodity Cost Inflation

Rising commodity costs can erode margins and necessitate price increases, potentially affecting demand and profitability if not managed effectively over time.

Restaurant Brands International Business Overview & Revenue Model

Company Description

Restaurant Brands International Inc. (QSR) is one of the world's largest quick-service restaurant companies, headquartered in Toronto, Canada. It operates a diverse portfolio of well-known brands, including Tim Hortons, Burger King, and Popeyes Louisiana Kitchen. The company focuses on providing high-quality food and exceptional customer service across its global network of franchised and company-owned restaurants. Through innovative menu offerings and strategic marketing initiatives, Restaurant Brands International aims to enhance its presence in the fast-food market and cater to evolving consumer preferences.

How the Company Makes Money

Restaurant Brands International generates revenue primarily through its franchising model, which allows the company to earn significant fees from franchisees based on sales and royalties. Additionally, it makes money from company-operated restaurants, where it retains a larger portion of revenues. The company also benefits from supply chain efficiencies and product distribution, which contribute to its earnings. Strategic partnerships, such as collaborations with food suppliers and technology firms, enhance operational capabilities and customer engagement, further driving revenue growth.

Restaurant Brands International Financial Statement Overview

Summary

Restaurant Brands International demonstrates solid revenue growth and operational efficiency, but faces challenges with declining net profit margins and high leverage. The company shows positive cash flow trends, which is a strength, but the high debt levels could pose risks if not managed carefully. Overall, the financial health is stable with room for improvement in profitability and leverage management.

Income Statement

Restaurant Brands International shows a steady revenue growth rate of 3.76% in the TTM, indicating positive momentum. However, the net profit margin has decreased from 12.15% in 2024 to 9.43% in the TTM, suggesting some pressure on profitability. The gross profit margin remains stable at around 37.6%, and the EBIT margin is strong at 24.07%, reflecting efficient operational management.

Balance Sheet

The company has a high debt-to-equity ratio of 4.82 in the TTM, which poses a risk due to significant leverage. However, the return on equity is robust at 26.89%, indicating effective use of equity to generate profits. The equity ratio is relatively low, suggesting a heavy reliance on debt financing.

Cash Flow

Free cash flow growth is positive at 9.72% in the TTM, showing improvement in cash generation. The operating cash flow to net income ratio is 0.58, indicating moderate cash conversion efficiency. The free cash flow to net income ratio is strong at 0.85, suggesting good cash flow relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.11B	8.41B	7.02B	6.50B	5.74B	4.97B
Gross Profit	3.42B	3.02B	2.80B	2.60B	2.37B	1.97B
EBITDA	2.50B	2.66B	2.24B	2.07B	2.04B	1.50B
Net Income	859.00M	1.02B	1.19B	1.01B	838.00M	486.00M
Balance Sheet
Total Assets	25.69B	24.63B	23.39B	22.75B	23.25B	22.78B
Cash, Cash Equivalents and Short-Term Investments	1.03B	1.33B	1.14B	1.18B	1.09B	1.56B
Total Debt	16.00B	15.96B	14.52B	14.49B	14.62B	14.12B
Total Liabilities	20.60B	19.79B	18.66B	18.48B	19.39B	19.06B
Stockholders Equity	3.32B	3.11B	2.87B	2.50B	2.24B	2.17B
Cash Flow
Free Cash Flow	1.36B	1.30B	1.20B	1.39B	1.62B	804.00M
Operating Cash Flow	1.60B	1.50B	1.32B	1.49B	1.73B	921.00M
Investing Cash Flow	-306.69M	-660.00M	11.00M	-64.00M	-1.10B	-79.00M
Financing Cash Flow	-1.08B	-625.00M	-1.37B	-1.31B	-1.09B	-821.00M

Restaurant Brands International Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 68.48
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For QSR, the sentiment is Positive. The current price of 68.48 is above the 20-day moving average (MA) of 63.94, above the 50-day MA of 64.43, and above the 200-day MA of 64.56, indicating a bullish trend. The MACD of 0.88 indicates Negative momentum. The RSI at 69.92 is Neutral, neither overbought nor oversold. The STOCH value of 98.42 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for QSR.

Restaurant Brands International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PZA	77 Outperform	$518.31M	16.50	10.14%	5.98%	-0.26%	-2.48%
QSP.UN	73 Outperform	C$43.09B	25.70	24.42%	3.68%	25.29%	-22.90%
QSR	72 Outperform	$31.14B	25.98	27.00%	3.56%	21.80%	-34.35%
MTY	69 Neutral	$889.90M	23.34	4.59%	3.26%	0.55%	-59.39%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
ODD	44 Neutral	C$16.24M	―	―	―	-2.40%	9.13%