Want to see TSE:PZA full AI Analyst Report?
Top Page
Pizza Pizza Royalty
(TSX:PZA)
Select Model
Select Model
Rating:67Neutral
Price Target:
C$11.50
▼(-5.89% Downside)
Action:Reiterated
Date:08/10/26
The score is primarily supported by strong underlying profitability, conservative leverage, and an attractive dividend yield. Offsetting these positives are meaningful near-term business softness (TTM revenue and free cash flow deterioration), a cautious outlook highlighted by weak same-store sales and a dividend reduction, and only partially improving technical momentum within a longer-term downtrend.
Positive Factors
Royalty-Based Business Model
The royalty structure gives PZA exposure to restaurant system sales without directly operating the restaurants. This supports a comparatively focused business model, while the established Pizza Pizza system provides an ongoing base for royalty generation and shareholder distributions.
Negative Factors
Weak Same-Store Sales
Same-store sales are a direct driver of royalty income, so the decline signals pressure on the underlying restaurant system rather than only on PZA’s corporate costs. Continued traffic weakness or reduced discretionary spending could constrain royalties and cash available for distributions.
Read all positive and negative factors
Positive Factors
Negative Factors
Royalty-Based Business Model
The royalty structure gives PZA exposure to restaurant system sales without directly operating the restaurants. This supports a comparatively focused business model, while the established Pizza Pizza system provides an ongoing base for royalty generation and shareholder distributions.
Read all positive factors
Pizza Pizza Royalty (PZA) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$352.58M
Dividend Yield8.34%
Average Volume (3M)95.77K
Price to Earnings (P/E)11.5
Beta (1Y)0.67
Revenue Growth-0.69%
EPS Growth-2.98%
CountryCA
Employees1,100
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)0.91
Shares Outstanding24,618,393
10 Day Avg. Volume61,877
30 Day Avg. Volume95,774
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)1.73
Price to Sales (P/S)12.76
P/FCF Ratio16.46
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.91
Revenue Forecast (FY)C$620.00M
Pizza Pizza Royalty Business Overview & Revenue Model
Company Description
Pizza Pizza Royalty Corp., through its subsidiary, Pizza Pizza Royalty Limited Partnership, franchises and operates quick-service restaurants under the Pizza Pizza and Pizza 73 brands in Canada. The company was founded in 1967 and is headquartered...
How the Company Makes Money
Pizza Pizza Royalty Corp. makes money primarily by earning royalties based on system sales generated by restaurants in its royalty pool. Under its royalty arrangement, an operating company (commonly referred to as the franchisor/operator of the Pi...
Pizza Pizza Royalty Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 02, 2026
Earnings Call Sentiment Neutral
The call presents a mixed picture: management executed successful promotional and product initiatives that drove engagement, category lifts (poutine +36% YoY) and some market share gains, and the royalty pool grew by 20 restaurants. However, core top-line performance weakened with same-store sales down 5.0% and royalty income down 3.6%, nontraditional locations were adversely affected by lower international student enrollment, and financing and payout pressures persist (payout ratio 102%, dividend reduced ~12.9%). Management has taken proactive steps (dividend reduction, cost control, targeted promotions, disciplined unit growth) to stabilize results, but near-term macro and traffic headwinds remain meaningful.Positive Updates
Product and Promotion Successes
Several high-impact product and promotional initiatives performed well: the 'Buck an Inch' offer quickly became the #1 selling menu item; national slice size increased by 25% with a nominal price change and drove strong customer response; $5 Slice & Drink sustained walk-in traffic; FIFA activations (Dip Cup Nations, Pitch Party Pizza, Pie-dration Break) increased engagement and made Pizza Pizza the #1 searched pizza brand in Canada during the activation.
Negative Updates
Same-Store Sales Decline
Overall same-store sales decreased by 5.0% in Q2 2026. Pizza Pizza same-store sales declined 4.9% and Pizza 73 declined 5.3%, driven by lower traffic and reduced discretionary spending.
Read all updates
Q2-2026 Updates
Positive
Negative
Product and Promotion Successes
Several high-impact product and promotional initiatives performed well: the 'Buck an Inch' offer quickly became the #1 selling menu item; national slice size increased by 25% with a nominal price change and drove strong customer response; $5 Slice & Drink sustained walk-in traffic; FIFA activations (Dip Cup Nations, Pitch Party Pizza, Pie-dration Break) increased engagement and made Pizza Pizza the #1 searched pizza brand in Canada during the activation.
Read all positive updates
Company Guidance
Guidance from the call was cautious: management expects the macroeconomic environment to remain challenging in the near term and will prioritize financial stability while driving traffic through value, cultural marketing and product innovation and pursuing disciplined network growth (targeting roughly ~2% annual expansion, i.e., about two dozen traditional stores over time). Key metrics cited include same‑store sales down 5.0% (Pizza Pizza -4.9%, Pizza 73 -5.3%), partnership royalty income down 3.6% to $10.0M for the quarter, 814 restaurants in the royalty pool (712 Pizza Pizza, 102 Pizza 73, up from 794), a network of well over 800 restaurants, and recent net additions of +20 restaurants on Jan 1, 2026 (39 openings less 19 permanent closures). Financial prudence actions: a ~12.9% monthly dividend reduction (from $0.0775 to $0.0675), quarterly dividends of $5.2M ($0.2125/share) versus $5.7M prior ($0.2325), a payout ratio of ~102% (down from 108%), a $2.2M working capital reserve (used $100k in the quarter), interest paid of $439k on a $47M credit facility, and an all‑in facility rate of 3.51% for the next three years (3‑year swap locked at 2.51% vs maturing 1.81%); the company continues to target an annualized payout ratio near 100% while protecting franchisee economics.Pizza Pizza Royalty Financial Statement Overview
Summary
Income Statement
76
Positive
Balance Sheet
72
Positive
Cash Flow
64
Positive
| Breakdown | TTM | Dec 2025 | Mar 2025 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 40.09M | 40.79M | 39.81M | 40.22M | 36.43M | 31.92M |
| Gross Profit | 40.09M | 40.79M | 39.81M | 40.22M | 36.43M | 31.92M |
| EBITDA | 39.45M | 39.96M | 39.48M | 39.95M | 35.88M | 31.38M |
| Net Income | 30.68M | 31.34M | 30.97M | 30.98M | 27.55M | 23.92M |
Balance Sheet | ||||||
| Total Assets | 381.97M | 377.10M | 373.75M | 370.09M | 367.83M | 363.06M |
| Cash, Cash Equivalents and Short-Term Investments | 2.13M | 3.58M | 5.78M | 8.51M | 7.94M | 6.16M |
| Total Debt | 46.80M | 46.74M | 46.99M | 46.98M | 46.96M | 46.94M |
| Total Liabilities | 75.54M | 75.61M | 75.53M | 76.18M | 75.41M | 72.83M |
| Stockholders Equity | 306.43M | 301.49M | 298.22M | 293.91M | 292.42M | 290.23M |
Cash Flow | ||||||
| Free Cash Flow | 30.65M | 31.64M | 30.80M | 31.35M | 28.99M | 24.75M |
| Operating Cash Flow | 30.65M | 31.64M | 30.80M | 31.35M | 28.99M | 24.75M |
| Investing Cash Flow | 3.00M | 2.00M | 1.00M | 0.00 | -2.50M | -750.00K |
| Financing Cash Flow | -33.64M | -33.83M | -33.52M | -30.78M | -27.21M | -23.60M |
Pizza Pizza Royalty Technical Analysis
Negative
12.22
Price Trends
10.92
Negative
11.75
Negative
13.20
Negative
Market Momentum
-0.09
Negative
42.70
Neutral
24.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PZA, the sentiment is Negative. The current price of 12.22 is above the 20-day moving average (MA) of 10.40, above the 50-day MA of 10.92, and below the 200-day MA of 13.20, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 42.70 is Neutral, neither overbought nor oversold. The STOCH value of 24.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:PZA.
Pizza Pizza Royalty Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | C$741.43M | 6.79 | 12.54% | 4.44% | -3.60% | 234.75% | |
68 Neutral | C$866.46M | 15.28 | 25.64% | 5.30% | 2.77% | 101.33% | |
67 Neutral | C$352.58M | 11.46 | 10.09% | 8.34% | -0.69% | -2.98% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
40 Underperform | C$2.99M | -0.22 | 41.50% | ― | -25.68% | -47.57% |
* Consumer Cyclical Sector Average
TSE:PZA
Pizza Pizza Royalty
10.43
-4.12
-28.31%
TSE:AEG
Aegis Brands
0.23
-0.06
-20.69%
TSE:MTY
MTY Food Group
32.46
-0.10
-0.31%
TSE:FOOD
Goodfood Market Corp
0.03
-0.25
-89.29%
TSE:AW
A & W Food Services of Canada Inc.
36.22
1.55
4.46%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.