Papa John's – Time To Exit?

“Cut-to-the-Chase” Members Already Up   150% Potential Profit
On This Options Trade!

And More Is Likely In The Making!

by Ian Harvey

August 01, 2018




Papa John's Int'l, Inc. (NASDAQ: PZZA)

Here is an update of Papa John's options put trade. This options trade was recommended to “Cut-to-the-Chase” Members on Wednesday, July 25, 2018, based on Papa John’s very unstable position due to founder and former CEO John Schnatter creating a whirlwind of bad publicity for the company; which has provided a potential profit of  150% for members!



The Trade.......

…….from…… “Cut-to-the-Chase” Recommendations

- Week Beginning Monday, July 23, 2018 -

The Details……..

Papa John's Int'l, Inc. (NASDAQ: PZZA) is in disarray right now. Founder and former CEO John Schnatter has created a whirlwind of bad publicity for the company, ranging from Schnatter making controversial comments regarding NFL anthem protests, to him using a racial slur on conference calls to Forbes blowing the lid open on what they call a "toxic culture" fostered by Schnatter.

The ongoing battle between Papa John's and its founder is putting the company in a precarious position, threatening not just future sales, but employee and franchisee commitment to the brand, an analyst said, as he downgraded the stock to sell from hold.

Shares of Papa John's fell nearly 10 percent in afternoon trading Monday to a 52-week low, on pace for its worst day since November 2015 when the stock plummeted on a weak earnings report. The stock is down more than 30 percent over the last year.

"The outlook for Papa John's is growing dimmer with recent media reports citing a fraternal corporate culture that is reinforcing consumer perception that Papa John's is not a trusted brand," Chris O'Cull, a Stifel analyst, wrote in a research note Sunday……continue reading…..

The Trade……..

Option trade to consider: Buy the PZZA AUG 20 2018 45.000 PUT at approximately $2.00.

The Result So Far………

Repeated PR gaffes by Papa John’s founder and now ousted chairman have been detrimental to the company’s fundamentals. After a controversial statement on the NFL back in November; and more recently the use of a racial slur on a company call; profits and revenues for the pizza chain have been slowly declining for the last two quarters, with no expectation to improve in Q2. North American System Wide Comparable Sales have been falling since Q2 2017, with the consensus calling for -4% in Q2 due to decreasing foot traffic.

Earnings Report and Movement Expectations……

Papa John's will report earnings on Tuesday, August 7, 2018 at market close. Analysts' forecasts that the consensus EPS forecast for the quarter is $0.50, revised down by 11% in the last 3 months and lower than Wall Street’s $0.52. The reported EPS for the same quarter last year was $0.65.

Revenues are also expected to come in lower at $420M as compared to the sell side’s consensus of $422.5M, a number that has been revised downward by 4% since last quarter. Year-over-year (YoY) EPS and revenue growth are expected to come in at -23% and -3%, respectively.

The Profits.....

So, for “Cut-to-the-Chase” members who managed to execute this trade recommended by Stock Options Made Easy; and wish to take potential profits now, 150%, at last look, was available -- time to EXIT?

Entering the option trade at a cost of $2.00 or less; and now as high as $5.00; one options contract would provide a profit of $300.00; or 150% Potential Profit.


It is very possible that further profit can be made from this put options trade, but as they say, “a bird-in-the-hand is better than two-in-the-bush”. There are several choices to be decided now……

  • ….. take the profits now,
  • …..take half the profits, and then take rest of profits before the earnings report,
  • …..take half the profits, and then take rest of profits after the earnings report, (which is the risk that the company may surprise!),
  • …..continue holding until after the earnings report, or
  • …..wait until expiry.

As you would have by now realized, some of our trades are based on earnings predictions. This is not to say all trades recommended to members follow this pattern, as seen in this scenario as part of the “Cut-to-the-Chase Series”, but during earnings season this strategy has been very profitable.

Sometimes it is our approach to predict whether a company will beat or miss estimates, whether the stock will appreciate or depreciate as a result and what strategies investors and traders can use – such as found with the “Earnings Predictions Program”. This type of prediction is based on thorough investigation and fundamentally based research, and the results have been very exceptional.

Strategies to Consider……

"When To Exit A Trade Based On Earnings?".....READ MORE.....

"Trading Capital Management" is a key component of your trading strategy. The strategy, on which we base our trades to achieve maximum profit, and to minimize loss, is contingent on using an equal amount of money for each trade.

……continue reading this article……

Our proven track record says it all!!

If you not a member ……… SIGN IN HERE

Other Options…….

If you interested in "Earnings Predictions" just click here……

or "Mentorship Program" here....

Best of Trading,
Ian Harvey
Director of Stock Options Made Easy


”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.

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