Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, bakery/cafe operator Panera Bread
With that in mind, let's take a closer look at Panera's business and see what CAPS investors are saying about the stock right now.
Panera facts
| Headquarters (Founded) | St. Louis (1981) |
| Market Cap | $3.29 billion |
| Industry | Restaurants |
| Trailing-12-Month Revenue | $1.67 billion |
| Management |
CEO William Moreton (since 2010) CFO Jeff Kip (since 2006) |
| Return on Equity (Average, Past 3 Years) | 17.9% |
| Cash/Debt | $229.6 million / $0 |
| Competitors |
Chipotle Mexican Grill McDonald's Starbucks |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 89% of the 1,296 members who have rated Panera believe the stock will outperform the S&P 500 going forward. These bulls include All-Stars FreeFlyingFool and fellow Fool Thomas Engle (TMF1000), both of whom are ranked in the top 11% of our community.
This past summer, FreeFlyingFool listed several of Panera's tasty qualities:
Solid balance sheet, good growth prospects, and a great customer experience. They'll see some headwinds due to rising food costs, and a double dip could mean that customers eat out less. But the valuation isn't so bad and over the medium term, I think they do quite well.
In fact, Panera currently sports a reasonable PEG ratio of 1.3. That represents a discount to competitors like Chipotle (2.2), McDonald's (1.7), and Starbucks (1.6).
Thomas elaborates on the Panera bull case:
The next report will be reported at the end of October and it should be a good report. They have a lot of growth potential and they have grown their store base without debt. ...
They have similar growth potential as [Chipotle] but the valuation is much better.
I also think beside the growth of their store base, they can take market share, by expanding their menu into bakery goods that in time could create more streams of revenues. The growth areas in which they could expand are numerous. It may not happen until store base growth slows, but in time, they could expand into bakery goods. Their size would give them many economy of scale advantages.
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Interested in another easy way to track Panera? Add it to your watchlist.
