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What To Expect From Yum! Brands’s (YUM) Q4 Earnings

StockStory - Tue Feb 6, 1:02AM CST

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Fast-food company Yum! Brands (NYSE:YUM) will be reporting earnings tomorrow before market open. Here's what investors should know.

Last quarter Yum! Brands reported revenues of $1.71 billion, up 4.1% year on year, missing analyst expectations by 3.6%. It was a mixed quarter for the company, with an impressive beat of analysts' gross margin estimates but a miss of analysts' revenue estimates.

Is Yum! Brands buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Yum! Brands's revenue to grow 4.3% year on year to $2.11 billion, slowing down from the 6.8% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.40 per share.

Yum! Brands Total Revenue

The analysts covering the company have been growing increasingly bearish about the business heading into the earnings, with revenue estimates seeing eleven downward revisions over the last thirty days.The company missed Wall St's revenue estimates four times over the last two years.

Looking at Yum! Brands's peers in the restaurants segment, some of them have already reported Q4 earnings results, giving us a hint what we can expect. McDonald's delivered top-line growth of 8.1% year on year, missing analyst estimates by 0.7% and Starbucks reported revenues up 8.2% year on year, missing analyst estimates by 2.1%. Starbucks was up 2.3%, and McDonald's was down 1.7%.

Read our full analysis of McDonald's's results here and Starbucks's results here.

Investors in the restaurants segment have had steady hands going into the earnings, with the stocks down on average 0.8% over the last month. Yum! Brands is down 1.5% during the same time, and is heading into the earnings with analyst price target of $141.6, compared to share price of $126.7.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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The author has no position in any of the stocks mentioned.

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