Papa John’s International, Inc. (PZZA): A Bull Case Theory

 We came across a bullish thesis on Papa John’s International, Inc. on Hidden Rock Capital’s Newsletter’s Substack by Hidden Rock Capital. In this article, we will summarize the bulls’ thesis on PZZA. Papa John’s International, Inc.’s share was trading at $48.68 as of October 14th. PZZA’s trailing and forward P/E were 21.02 and 20.12 respectively according to Yahoo Finance.

Yesterday, news leaked that Apollo is preparing a takeover offer for Papa John’s Pizza (PZZA) at $64 per share, yet the stock has remained in the $45–$50 range, roughly 30–35% below the reported takeout price. The market appears cautious due to the bid being unconfirmed and Apollo’s prior June offer of $60, which was not addressed by management. Despite this, the latest $64 offer represents a significant ~50% premium over PZZA’s pre-rumor stock price, suggesting a stronger likelihood of acceptance after additional due diligence.

PZZA’s stock has been essentially flat over the past year despite a strong bull market, and the lack of a controlling shareholder—combined with institutional ownership from BlackRock and Vanguard—makes it easier for Apollo to secure approval. Activist investor Irth Capital, which owns nearly 5% of shares and previously allied with Apollo, would likely support the bid in any shareholder vote, adding further credibility to the takeover scenario.

The potential upside is clear: if the offer is confirmed and accepted at $64, investors could realize 30–35% gains from the current $49 share price, with possible additional upside if the offer increases. The downside risk is roughly 15% if the offer proves false or is rejected, bringing shares back toward $42–$43. A conservative approach is buying common shares, providing a roughly 2:1 reward-to-risk ratio, while options—such as $50 strike calls expiring January 16, 2026—offer leveraged exposure with amplified potential gains, though at higher risk of losing the premium paid. Overall, PZZA presents an attractive special situations opportunity, with the combination of a compelling takeover premium, supportive shareholders, and asymmetric upside making it a strategic setup for investors seeking risk-adjusted returns.

Previously we covered a bullish thesis on Papa John’s International, Inc. (PZZA) by Dominick D’Angelo in March 2025, which highlighted the potential buyout by Irth Capital, CEO Todd Penegor’s turnaround, and operational improvements. The company’s stock price has appreciated approximately by 8.68% since our coverage. The thesis still stands as long-term value drivers remain intact. Hidden Rock Capital shares a similar thesis but emphasizes Apollo’s $64 takeover offer and near-term upside potential.

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Disclosure: None.