What Traders Need to Know About Potbelly Stock Ahead of Earnings

PBPB stock price is up 26% year-to-date

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Potbelly Corporation (NASDAQ:PBPB) is a sandwich shop chain that operates in the United States. Potbelly shops offer sandwiches, salads, shakes, and other menu items. Potbelly has expanded across the country, operating more than 400 company-owned shops. Additionally, Potbelly franchisees operate over 40 shops.

PBPB has increased an outstanding 26% year-to-date. Additionally, the equity has grown 278% from its record low of $1.50, hit last March. Shares of PBPB are currently currently trading just 7% off their annual high of $5.95.

Potbelly recently announced the date for the release of its fiscal fourth quarter and full year of 2020 financial results. The company will report its earnings after the close on Thursday, March 11. Wall Street analysts have the company projected to report a quarterly loss of -$0.39  per share for PBPB.

Potbelly has beaten earnings expectations just once out of its last four reports. For the fourth quarter of 2019, PBPB beat analyst estimates by a margin of $0.02 and reported an earnings per share (EPS) of $0.03. For the first quarter of 2020, Potbelly decreased its EPS to -$0.32 and missed expectations by a margin of $0.09. For the second quarter of 2020, PBPB had another decrease in earnings, reporting an EPS of -$0.63 and missing expectations by a margin of $0.17. In its most recent quarterly report, Potbelly reported an EPS of -$0.42 and missed expectations by $0.08.

Going into its fourth-quarter earnings announcement, Potbelly is struggling fundamentally across the board. The company has demonstrated marked and consistent decreases in both revenues and net income. In the past 12 months Potbelly has generated $318 million in revenues, marking a $90 million decrease since fiscal 2019 and a $110 decrease over the past three years. PBPB has also decreased net income by $26 million in the past year, bringing its total net losses to $50 million. Since 2017, Potbelly Corporation's net income has fallen by $43 million. PBPB’s total debt of $253.5 million outweighs its market cap by almost $100 million and its cash total stands at a relatively low $23.41 million. Overall, Potbelly's continued lack of profit and steady declines makes it far from an ideal investment for long-term investors at this time.


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