Q: What did you think of their earnings? I finally bought a starter position on the recent dip. Would you be ok adding here?
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5i Research Answer:
QSR is now trading at 21x times' Forward P/E. In the 1Q-2024, QSR revenue grew 8% to $1.74B, beating estimates of $1.7B and EPS was $0.73 beating estimates of $0.72. The balance sheet has net debt of $12.3B, and a net debt/EBITDA of 4.8x. The leverage level has gone down slightly from last year of 5.1x. Comparable sales were solid across all brands except Firehouse, which the company recently acquired. Long-term guidance remains unchanged, which the company expects comparable sales to grow 3% with 5% restaurant growth on average until FY2028. Overall, we think the quarter was decent, and valuation is not too expensive relative to other restaurant names, and we are okay to add some here.