Important note

This AI stock analysis for Restaurant Brands International is not up to date. Creating and accessing our AI stock Analysis (powered by our data and Chat GPT) is only available for our premium users. Sign up to get access today!

Restaurant Brands International - AI Stock Analysis

Analysis generated November 17, 2024

Restaurant Brands International Inc. (RBI) is one of the world's largest quick-service restaurant companies, with a global presence through its iconic brands such as Tim Hortons, Burger King, and Popeyes. The company was formed in 2014 through a merger between Burger King and Tim Hortons, and it added Popeyes to its portfolio in 2017. Headquartered in Toronto, Canada, RBI operates through franchised locations, which provide a scalable model that promotes international growth while mitigating operational complexities. Despite recent challenges, the company continues to aim for strategic expansion, innovation, and brand development.

Fundamental Analysis

Looking at the recent financials, RBI reported revenue of $2.29 billion for the last quarter, which is notable for multiple reasons. This represents a 10.14% increase compared to the previous quarter and an impressive 24.71% increase year-over-year. Such significant growth is a positive indicator of the company’s ability to drive top-line growth in challenging market conditions.

However, the net income for the last quarter was $252 million, marking a 10.00% decrease compared to the previous quarter. While the net income is consistent with the same quarter last year, the sequential decline raises some concerns about the company's profitability.

The EBITDA for the last quarter was $548 million, a 3.69% decrease from the prior quarter. While this decline is concerning, it's worth noting that EBITDA is up 8.09% compared to the same quarter last year, indicating positive year-over-year growth. Despite these fluctuations, RBI's current P/E ratio is 16.92, which lies within a normal range and suggests the stock is neither overvalued nor undervalued in the market.

It’s also worth noting that there has been insider selling in recent months. This could be viewed as a bearish signal, indicating that those closest to the company may not be confident in its short-term prospects.

Technical Analysis

Today's stock price for RBI stands at $67.52, which represents a 5.00% decrease from a month ago. This short-term decline could be concerning, especially since the stock price is also down by 2.07% compared to a year ago, signaling potential long-term issues.

The trend appears bearish, with the current SMA10 at $67.82, down from the previous SMA10 of $67.92. This decline in the SMA10 suggests a potential downward trend in price movement. The Relative Strength Index (RSI) is at 60.9, indicating a neutral condition without any significant signs of being overbought or oversold.

Alternative Data Analysis

Examining alternative data points, Restaurant Brands International has shown a significant drop in job postings, with only 45 open positions listed currently, down by 49% in the last couple of months. This may indicate efforts to cut costs, which is not usually a positive sign for a company supposedly in a growth phase. Employee sentiment remains neutral, suggesting mixed feelings about the company's future among its workforce.

Additionally, web traffic to RBI's webpage is estimated at 130,000 visitors, a 35% decrease over the past couple of months. This decline could point to a potential loss in customer engagement, which is a worrisome trend for any consumer-facing business. AltIndex's AI score for RBI is 42, which is a hold signal, reflecting a cautious outlook based on a blend of fundamental, technical, and alternative data.

Conclusion and Recommendation

In summary, Restaurant Brands International presents a mixed picture of both growth and challenges. The revenue and year-over-year EBITDA growth are strong positives, yet the declining net income and EBITDA on a sequential basis are red flags. The bearish trend from a technical perspective coupled with the decline in job postings and web traffic add further caution.

Given this analysis, the recommendation would be to hold. The company has shown potential for long-term growth, but there are multiple short-term risks and areas of concern that need to be monitored. Investors should exercise caution and await more positive signs of turnaround before considering increasing their stake in the company.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.