Potbelly (PBPB) Surpasses Q3 Earnings and Revenue Estimates

Potbelly (PBPB - Free Report) has reported its quarterly earnings, revealing a profit of $0.08 per share, which exceeds the Zacks Consensus Estimate of $0.05 per share. This is an improvement compared to earnings of $0.04 per share for the same quarter last year, marking a significant milestone for the company.

This recent performance showcases an impressive earnings surprise of 60%. Just a quarter earlier, analysts anticipated that Potbelly would generate earnings of $0.05 per share, but the final outcome exceeded those expectations by delivering $0.08.

Over the past four quarters, Potbelly has reportedly surpassed analysts’ earnings per share (EPS) estimates three times, indicating a consistent trend of outperforming expectations.

In terms of revenue, Potbelly generated $115.12 million for the quarter ending September 2024, which is also higher than the Zacks Consensus Estimate by 1.61%. However, when compared to the same quarter last year, where revenues reached $120.77 million, this shows a slight decline. Interestingly, the company has also managed to exceed revenue estimates three times in the past four quarters as well.

The ability of Potbelly's stock to maintain its recent upward price movement, based on these newly released figures and future earnings forecasts, will largely depend on the insights shared by management during the earnings call.

Since the beginning of the year, Potbelly's shares have decreased approximately 19.3%, contrasting sharply with the S&P 500, which saw a growth of 24.3% over the same period.

Future Prospects for Potbelly

As Potbelly struggles to keep up with broader market performance this year, investors are understandably curious about what the future holds for the stock.

While definitive answers are hard to come by, one reliable measure to gauge Potbelly's future is its earnings outlook. This outlook consists of current consensus earnings forecasts for the next quarter or two, along with recent changes to these expectations.

Research indicates a strong correlation between short-term stock performance and trends in earnings estimate revisions. Investors can monitor these revisions independently or can use a robust rating tool such as the Zacks Rank, which has demonstrated a strong ability to predict stock movements based on earnings guidance.

Before this earnings release, the trend of estimate revisions for Potbelly was not favorable. While these estimates may adjust following the latest earnings report, the existing trend translates into a Zacks Rank of #4 (Sell) for Potbelly. This suggests that the stock is likely to continue underperforming relative to the market in the short run. A detailed list of top-performing stocks can be accessed through various financial platforms.

It will be interesting to monitor how the estimates for the upcoming quarters and the current fiscal year evolve in the coming days. Currently, the consensus EPS estimate stands at $0.06 with projected revenues of $114.7 million for the next quarter, and an estimated profit of $0.20 with $458.9 million in revenues for the ongoing fiscal year.

Investors should consider the fact that industry outlooks can also significantly influence stock performance. The Zacks Industry Rank indicates that the Retail - Restaurants sector is currently positioned in the top 29% of more than 250 Zacks rated industries. Historical data shows that the best performing half of Zacks-rated industries tend to outperform the weaker half by a ratio greater than 2 to 1.

As a point of comparison, another company within the same industry, Cava Group (CAVA - Free Report), has yet to release its quarterly results for the period ending September 2024, with expectations set for November 12. Analysts predict that Cava Group will report earnings of $0.11 per share, marking a year-over-year increase of 83.3%. Notably, the EPS estimate for this quarter has been revised 14.3% upwards over the past 30 days. Revenue projections for Cava Group are anticipated to reach $235.13 million, reflecting a 33.9% rise from the prior year.Earnings, Revenue, Stocks