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Yum! Brands (YUM)
NYSE:YUM

Yum! Brands (YUM) AI Stock Analysis

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YU

Yum! Brands

(NYSE:YUM)

68Neutral
Yum! Brands' overall score reflects strong financial performance and positive strategic initiatives, offset by high leverage and valuation concerns. The company's growth in digital sales and strategic partnerships are significant positives, though financial risks and valuation stretch warrant caution.
Positive Factors
Digital Transformation
Yum! Brands is accelerating the rollout of its Byte by Yum SaaS platform, which supports their digital transformation strategy.
Product Innovation
The return of successful menu items like Crispy Chicken Nuggets is expected to contribute positively to sales in the upcoming quarter.
Sales Growth
Taco Bell's menu innovation and digital sales growth have driven a 9% increase in comparable sales.
Negative Factors
Expansion Challenges
Unit growth is lagging, pressured by closures, impacting the overall expansion strategy.
Market Competition
Global market competition remains highly intense, with rising contenders possibly scaling to reach fast food players scale faster than expected.
Sales Decline
Pizza Hut's US comparable sales declined by 5%, indicating challenges in this segment.

Yum! Brands (YUM) vs. S&P 500 (SPY)

Yum! Brands Business Overview & Revenue Model

Company DescriptionYum! Brands, Inc. is a global leader in the quick-service restaurant industry, operating a diverse portfolio of fast-food brands that include KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill. With a presence in over 150 countries, Yum! Brands focuses on providing a variety of menu options that cater to different tastes and preferences, ranging from fried chicken and pizza to Mexican-inspired cuisine and chargrilled burgers. The company is committed to delivering a superior customer experience through its expansive network of franchise-operated restaurants.
How the Company Makes MoneyYum! Brands generates revenue primarily through franchise fees, royalties, and sales from company-owned restaurants. The majority of its restaurants are franchised, meaning franchisees pay initial fees and ongoing royalties based on a percentage of their sales to Yum! Brands. These franchise agreements provide a steady income stream with lower operational risk. Additionally, Yum! Brands earns revenue from the supply chain by selling food and paper products to franchisees. The company's strategic partnerships, marketing initiatives, and menu innovations further support its revenue growth. Key factors such as brand strength, global market presence, and scalability contribute significantly to Yum! Brands' earnings.

Yum! Brands Financial Statement Overview

Summary
Yum! Brands shows solid revenue growth and strong cash flow management. However, high leverage with negative equity poses financial risk, and net profit margin fluctuations require attention.
Income Statement
75
Positive
Yum! Brands shows a solid revenue growth trend over the past few years with a notable increase in total revenue from $5.65 billion in 2020 to $7.55 billion in 2024. Gross Profit Margin is consistently high as 100% due to the way cost is reported. EBIT and EBITDA margins are strong, indicating efficient operations. However, Net Profit Margin has seen some fluctuations. Overall, revenue growth and profitability are positive, but the net income dip in 2024 requires attention.
Balance Sheet
60
Neutral
The company operates with negative stockholder equity, indicating a high leverage situation due to substantial total debt exceeding total assets. Debt-to-equity ratio is not calculable due to negative equity, which poses financial risk. Despite this, the company has managed a stable asset base over the years. The balance sheet reflects potential financial vulnerability and high leverage, which are key risk factors.
Cash Flow
70
Positive
Operating cash flow is robust and growing, with an increase from $1.31 billion in 2019 to $1.69 billion in 2024, supporting strong free cash flow. The Free Cash Flow to Net Income Ratio is favorable, indicating effective cash management. However, fluctuations in net income and capital expenditures could impact long-term cash stability. Overall, cash flow management remains a strong suit.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
7.55B7.08B6.84B6.58B5.65B
Gross Profit
3.58B3.50B3.31B3.17B2.69B
EBIT
2.40B2.32B2.19B2.14B1.50B
EBITDA
2.56B2.48B2.40B2.41B1.76B
Net Income Common Stockholders
1.49B1.60B1.32B1.57B904.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
707.00M512.00M367.00M486.00M730.00M
Total Assets
6.73B6.23B5.85B5.97B5.85B
Total Debt
12.29B12.03B11.85B11.25B10.72B
Net Debt
11.67B11.52B11.48B10.76B9.99B
Total Liabilities
14.38B14.09B14.72B14.34B13.74B
Stockholders Equity
-7.65B-7.86B-8.88B-8.37B-7.89B
Cash FlowFree Cash Flow
1.69B1.32B1.15B1.48B1.15B
Operating Cash Flow
1.69B1.60B1.43B1.71B1.30B
Investing Cash Flow
-422.00M-107.00M-202.00M-173.00M-335.00M
Financing Cash Flow
-1.16B-1.43B-1.32B-1.77B-738.00M

Yum! Brands Technical Analysis

Technical Analysis Sentiment
Positive
Last Price149.14
Price Trends
50DMA
152.24
Negative
100DMA
143.08
Positive
200DMA
138.04
Positive
Market Momentum
MACD
-0.73
Negative
RSI
51.40
Neutral
STOCH
81.28
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For YUM, the sentiment is Positive. The current price of 149.14 is above the 20-day moving average (MA) of 145.84, below the 50-day MA of 152.24, and above the 200-day MA of 138.04, indicating a neutral trend. The MACD of -0.73 indicates Negative momentum. The RSI at 51.40 is Neutral, neither overbought nor oversold. The STOCH value of 81.28 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for YUM.

Yum! Brands Risk Analysis

Yum! Brands disclosed 28 risk factors in its most recent earnings report. Yum! Brands reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Yum! Brands Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
DPDPZ
77
Outperform
$16.60B27.78-14.74%1.29%4.28%13.76%
CMCMG
76
Outperform
$69.47B45.3045.57%12.57%21.42%
MCMCD
76
Outperform
$223.07B27.39-216.57%2.19%-0.22%
76
Outperform
$16.25B18.1715.73%1.63%2.79%19.36%
YUYUM
68
Neutral
$40.38B27.81-19.43%1.82%10.09%-11.50%
64
Neutral
$97.04B27.61-47.07%2.88%-0.50%-24.28%
61
Neutral
$6.66B11.712.96%4.01%2.64%-20.91%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
YUM
Yum! Brands
149.14
15.58
11.67%
CMG
Chipotle
51.56
-12.42
-19.41%
DPZ
Domino's Pizza
484.61
-30.55
-5.93%
MCD
McDonald's
311.96
49.05
18.66%
SBUX
Starbucks
84.69
13.60
19.13%
YUMC
Yum China Holdings
44.04
7.00
18.90%

Yum! Brands Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: 0.98%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted a strong performance driven by Taco Bell and KFC International, with significant strides in digital sales and new concepts. However, Pizza Hut U.S. faced challenges, and planned closures affected overall development metrics. Despite these issues, the overall sentiment is positive due to robust growth and strategic initiatives.
Q1-2025 Updates
Positive Updates
Strong Q1 Performance
Core operating profit increased by 8%, driven by Taco Bell U.S. and KFC International. System sales grew 5% with 3% growth in both same-store sales and unit growth.
Taco Bell U.S. Achievements
Taco Bell U.S. delivered a 9% increase in same-store sales and a 16% increase in operating profit. Digital sales grew 37% year-over-year, with digital mix reaching 42%.
KFC International Success
KFC International saw low single-digit traffic growth, including its ninth consecutive quarter of traffic growth in China. The brand opened 554 new stores across 50 countries.
Innovative Concepts and Partnerships
Introduction of new concepts like Live Mas Cafe and Quench by KFC. A new partnership with NVIDIA to enhance AI technologies across the system.
Franchise and Development Growth
751 new stores opened in Q1. KFC achieved the second highest first quarter for openings in its history. Strong franchisee sentiment at Global Franchise Convention.
Negative Updates
Pizza Hut U.S. Underperformance
Pizza Hut's system sales declined 3% in Q1, with disappointing same-store sales performance in the U.S., primarily due to an intense competitive environment.
Planned Closures Impact
Closure of 537 locations in Turkey and strategic closures in Pizza Hut negatively impacted net development numbers.
Company Guidance
During the 2025 First Quarter Earnings Call, the company highlighted a robust performance with core operating profit up by 8%, driven by strong results from Taco Bell U.S., which saw a 9% increase in same-store sales and a 16% rise in operating profit. KFC International also contributed significantly, with 554 new openings across over 50 countries and a 5% system sales growth. The company emphasized its AI-powered digital platform, Byte by Yum!, which has enhanced Taco Bell's digital momentum, leading to a 42% digital sales mix and a 37% year-over-year growth in sales. The strategic partnership with NVIDIA was announced, focusing on AI technology advancements. Overall, the company is on track for 8% core operating profit growth for the year, despite geopolitical and economic challenges, with a strong development pipeline and confidence in its strategic initiatives.

Yum! Brands Corporate Events

Product-Related AnnouncementsBusiness Operations and Strategy
Yum! Brands Partners with NVIDIA for AI Innovation
Positive
Mar 18, 2025

On March 18, 2025, Yum! Brands announced a partnership with NVIDIA to develop AI technologies for its global restaurant operations. This collaboration aims to integrate AI into Yum!’s Byte by Yum! platform, enhancing customer and team member experiences through voice AI agents, computer vision, and AI-driven analytics. The partnership signifies a major step in AI innovation within the restaurant industry, with plans to roll out these technologies in 500 restaurants across its brands. This strategic move is expected to optimize operations, improve customer engagement, and strengthen Yum! Brands’ leadership in restaurant technology.

Business Operations and Strategy
Yum! Brands Unveils Strategic Vision for Taco Bell
Positive
Mar 4, 2025

On March 4, 2025, Yum! Brands hosted Taco Bell Consumer Day, unveiling a strategic vision for Taco Bell’s future, including plans for innovation and global brand experience enhancement. Taco Bell aims for significant growth with targets of 8% U.S. same-store sales growth for Q1 2025 and ambitious goals for 2030, such as increasing annual unit volumes and expanding its international presence to 3,000 stores, highlighting its commitment to innovation and expansion.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.