Shares of Potbelly (PBPB) have been strong performers lately, with the stock up 33.2% over the past month. The stock hit a new 52-week high of $17.04 in the previous session. Potbelly has gained 80.3% since the start of the year compared to the 9% gain for the Zacks Retail-Wholesale sector and the -6.6% return for the Zacks Retail - Restaurants industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 6, 2025, Potbelly reported EPS of $0.09 versus consensus estimate of $0.08.
For the current fiscal year, Potbelly is expected to post earnings of $0.26 per share on $481.9 in revenues. This represents a -13.33% change in EPS on a 4.17% change in revenues. For the next fiscal year, the company is expected to earn $0.3 per share on $502.5 in revenues. This represents a year-over-year change of 15.38% and 4.27%, respectively.
Valuation Metrics
While Potbelly has moved to its 52-week high over the past few weeks, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Potbelly has a Value Score of C. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 65.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 19.9X. On a trailing cash flow basis, the stock currently trades at 23X versus its peer group's average of 11.1X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Potbelly currently has a Zacks Rank of #2 (Buy) thanks to a solid earnings estimate revision trend.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Potbelly passes the test. Thus, it seems as though Potbelly shares could have potential in the weeks and months to come.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Potbelly Corporation (PBPB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
