Benchmark maintains Buy on Potbelly stock with $16 target

On Friday, Benchmark analysts reiterated their Buy rating on Potbelly Corp (NASDAQ:PBPB) shares, maintaining a $16.00 price target. According to InvestingPro data, four analysts have recently revised their earnings estimates upward for the upcoming period, with price targets ranging from $14 to $16. The affirmation followed Potbelly’s disclosure of its fourth-quarter 2024 operating results, which had been largely preannounced during the ICR Conference in mid-January. The restaurant chain reported a revenue of $116.4 million, resulting in a Restaurant-Level Operating Margin (RLOM) of 16%, slightly above the anticipated 20 basis points. This performance, coupled with effective General and Administrative (G&A) expense control, excluding one-time charges of $2.5 million, led to Adjusted Earnings Per Share (AEPS) of $0.13 and Adjusted EBITDA of $9.7 million. These figures surpassed the consensus estimates of $0.07 for AEPS and $7.6 million for Adjusted EBITDA.

The analyst’s commentary highlighted the company’s ability to exceed expectations for the quarter, attributing the success to strong revenue and tight control over G&A expenses. The financial results indicated a robust end to the year for Potbelly, with the company also providing guidance for the first quarter of 2025 and the full fiscal year.

Looking ahead, Potbelly has set expectations for its performance in the upcoming quarters. The company’s guidance will likely be monitored by investors as an indicator of its ongoing financial health and operational efficiency.

Benchmark’s continued support for Potbelly stock with a $16.00 price target reflects confidence in the company’s strategy and potential for future growth. As the market processes this information, Potbelly’s shares may see investor interest based on the positive outlook and the company’s recent overperformance relative to expectations.

In other recent news, Potbelly Corporation reported its fourth-quarter 2024 earnings, significantly surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $0.13, well above the forecasted $0.05, and its revenue reached $116.63 million, exceeding the anticipated $115.23 million. Despite these positive results, Potbelly’s stock experienced a decline of 11.94% in after-hours trading. The company also noted a 24% increase in franchise revenue, reflecting strong performance in its franchise operations. Potbelly plans to open at least 38 new units in 2025, emphasizing its growth strategy. Analysts from Craig Hallum Capital Group and Lake Street Capital Markets have shown interest in the company’s unit growth and consumer behavior trends, respectively. Potbelly’s CEO, Bob Wright, highlighted the company’s strategic growth and menu innovation as key drivers for future success. The company also introduced a franchisee incentive program aimed at accelerating development.

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