Is Papa John's International, Inc. (PZZA) Among the Best Fast Food Stocks to Buy Now?

We recently compiled a list of the 12 Best Fast Food Stocks to Buy Now. In this article, we are going to take a look at where Papa John’s International, Inc. (NASDAQ:PZZA) stands against the other fast food stocks.

Fast food stocks are businesses that run quick-service restaurants. These stocks can be a smart option to invest in the restaurant industry, which tends to perform well even during economic downturns due to its low costs and convenience. For example, the early COVID-19 pandemic was not favorable for the restaurant business overall, but fast-food chains that were able to offer curbside pickup, delivery, and drive-thru services performed better than their competitors that relied on dine-in. A challenging economic situation presents fewer risks because many fast-food restaurants prioritize providing great value.

As per a research report, the global fast food market has expanded gradually in recent years. It will grow at a compound annual growth rate (CAGR) of 2.9%, from $645.2 billion in 2024 to $663.92 billion in 2025. Changes in customer choices and lifestyles, rapid urbanization, globalization, greater demand for convenience meals, and an increase in the working population have all contributed to historic expansion. The fast-food market’s largest region in 2024 was North America. Asia-Pacific is anticipated to be the fastest-growing region over the projection period.

Automation is changing the fast-food service business in the United States. Robotic systems and artificial intelligence tools are now reducing production times and increasing efficiency. Complex beverage preparation time has been reduced from 87 to just 36 seconds due to a new drink-making system. In the meantime, a dual-sided grill has sped up cooking by 70% in high-volume locations, and an avocado-processing robot reduces prep time by 50%. According to a National Restaurant Association research released in February 2023, 58% of restaurant operators anticipated that 2023 would see a rise in the usage of technology and automation to cope with labor shortages. In a May 2023 poll, HungerRush found that 36 percent of 1,000 Americans stated they believed that large restaurant chains lacked enough employees to process orders, make food, and deliver food.

Chief information officer Aaron Nilsson of Jet’s Pizza, a franchise with locations in Michigan, introduced a phone bot driven by artificial intelligence to take orders for pizza. He stated:

“Now most consumers expect their local pizza place and their favorite coffee house to remember their last order, know what credit card they want to use, and make it quick and easy for them to complete an order. Society has moved on and automation is expected – even from the small-time operator.”

According to a 2024 LendingTree survey, 78% of Americans now consider fast food a luxury, with prices rising by more than 60% since 2014. Quick-service restaurants (QSRs) have been compelled by this change to reconsider what value is. Companies are prioritizing quality, convenience, and technology over price competition to defend higher prices. According to Savneet Singh, CEO of a significant restaurant technology business, the value today isn’t just about price; it’s about the entire experience. Moreover, technology is being used by businesses to improve this perceived value. AI-powered kiosks, drive-thru technology, and mobile ordering shorten wait times and customize service, while kitchen automation increases reliability. These days, loyalty programs use data analytics to provide hyper-personalized rewards, which boosts consumer engagement and encourages repeat visits.

However, affordability is still crucial. The expense of fast food has caused 62% of consumers to cut back on their purchases, which has led several businesses to bring back $5 meal offers, as per the LendingTree study. A combination of price, quality, convenience, and personalization is the new QSR value equation. QSRs have the potential to redefine luxury as intelligent, easily accessible service by utilizing technology and loyalty.

Our Methodology

For this article, we sifted through the online rankings to form an initial list of the 20 Fast Food Stocks. From the resultant dataset, we chose 12 stocks with the highest number of hedge fund investors, using Insider Monkey’s database of 1,009 hedge funds in Q4 2024 to gauge hedge fund sentiment for stocks. We have used the stock’s revenue growth year-over-year as a tie-breaker in case two or more stocks have the same number of hedge funds invested.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).

Papa John’s International, Inc. (NASDAQ:PZZA)

Number of Hedge Fund Holders: 30   

Papa John’s International, Inc. (NASDAQ:PZZA) is one of the leading participants in the global QSR, or quick-service restaurant, pizza business, with over 6,000 locations in nearly 50 countries by the end of 2024. The company runs a franchised system, owning 9% of its restaurants and generating revenue through franchise royalties, pizza and related product sales at company-owned locations, and sales from its commissary supply chain. It is ranked 11th on our list of the Best Food Stocks.

Papa John’s International, Inc. (NASDAQ:PZZA)’s stock price increased by 18% after the firm was recently targeted for a possible $1.4 billion takeover by Irth Capital Management for $43 per share. However, the abrupt resignation of director Anthony Sanfilippo cast doubt on the deal’s legitimacy and caused uncertainty.

Nevertheless, a bullish thesis of the firm is supported by several facts. Todd Penegor, the CEO who was hired in August 2024, has an excellent history at Wendy’s, which suggests a possible turnaround. While 2025 EPS is predicted to drop 21%, a 34% recovery is anticipated in 2026, and same-store sales are anticipated to rise in late 2025.

Growth may be fueled by operational upgrades, including improving franchisee ROI, improving the pizza-making process, and updating the app. A franchised business model allows free cash flow to be used for share buybacks, which increases shareholder returns even further. If management performs well, Papa John’s International, Inc. (NASDAQ:PZZA) has a lot of long-term potential.

Overall, PZZA ranks 11th on our list of the 12 Best Fast Food Stocks to Buy Now. While we acknowledge the potential of Fast Food companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than PZZA but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.