Strength Seen in Potbelly (PBPB): Can Its 10.5% Jump Turn into More Strength?

Zacks Equity Research
Updated ·2-min read

Potbelly (PBPB) shares ended the last trading session 10.5% higher at $9.28. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 1.2% gain over the past four weeks.

Shares of Potbelly appreciated after the company provided an update on its business and financial results for the first quarter of fiscal 2023. For the fiscal first quarter, Potbelly’s prelim results reflected shop-store sales of 22-22.3% and shop-level margins in the 11.5-12% range. Earlier, the company had anticipated shop-store sales in the range of 18.5-20.5% and shop-level margins in 10-11.5% range.

This sandwich restaurant operator is expected to post quarterly loss of $0.01 per share in its upcoming report, which represents a year-over-year change of +93.8%. Revenues are expected to be $116.1 million, up 18.2% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Potbelly, the consensus EPS estimate for the quarter has been revised 22.2% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on PBPB going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Potbelly belongs to the Zacks Retail - Restaurants industry. Another stock from the same industry, Jack In The Box (JACK), closed the last trading session 1.2% higher at $88.33. Over the past month, JACK has returned 11.8%.

Jack In The Box's consensus EPS estimate for the upcoming report has changed +0.4% over the past month to $1.16. Compared to the company's year-ago EPS, this represents no change. Jack In The Box currently boasts a Zacks Rank of #2 (Buy).

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