# Panera Bread (PNRA)



## protomok (Jul 9, 2012)

I was mowing down some food at Panera bread the other day and I asked myself if this is a worthwhile company to invest in.

Fundamentally, they make high quality food and are just starting to expand into Canada. Their fast food / restaurant / coffee-tea hybrid concept does not have a lot of _direct_ competition and the Tim Hortons, Starbucks, etc. competitors are not even close in terms of the overall experience when you eat at this place.

Technically speaking they seem sound:
Revenue -> year over year revenue growth every year since 2003 -> $356 Million USD in 2003 - 2.130 Billion USD in 2012
EPS -> Again year over year increases every single year. 2003 EPS: 1.00, 2012 EPS: 5.89

Additionally they seem like an ideal candidate to start issuing a dividend.

I don't want to make an emotional decision here (and it is emotional - try their broccoli soup, seriously) but this company seems solid. Any thoughts?


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## GoldStone (Mar 6, 2011)

The stock is not cheap.

P/E 26.9

EV/EBIDTA 11.8

Everyone must be thinking the same way. Love the food! Gotta buy some stock!


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## andrewf (Mar 1, 2010)

I like their food, too. But there are many companies products I enjoy that may not be good investments.


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## jacofan (Apr 17, 2013)

always look for a Panera Bread when in the US but too pricey a stock for me. Wish they opened up in the Lower Mainland.


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## protomok (Jul 9, 2012)

Thanks for the comments guys.

Regarding valuation, is it better to compare against the S&P or the sector? For example the S&P500's P/E is 17.9 whereas PNRAs P/E is 27.0 which I agree makes PNRA look expensive. But the P/E for Panera Bread's "Industry Average" is 28.2. PNRA's Price/Book and Price/Sales is also better than their industry avg although price/cash flow is worse.

Perhaps a better question is if PNRA is overvalued, what would be a better alternative in this space? McDonalds and Tim Hortons have better P/E ratios (17.3 and 20.9 respectively) but I don't see as much growth going forward.


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