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Potbelly (PBPB) Shares Double After IPO

Tickers in this article: NDLS PBPB SBUX

NEW YORK ( TheStreet) -- Sandwich chain Potbelly (PBPB)  skyrocketed 138.5% to $33.40, after its shares went public at $14 a share.

Potbelly's IPO was for 7.5 million shares. At its current price, the company is worth an estimated $862 million.

The Chicago-based franchise chain has 286 stores across 19 states.

Fast-casual restaurant Noodles , which floated in June at double its initial share pricing, is 1.65% higher to $43.74 on Friday.  Noodles & Co. has 327 restaurants nationwide.

Potbelly's largest shareholder is Starbucks  CEO Howard Schultz.

TheStreet Ratings team rates Starbucks as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate Starbucks (SBUX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SBUX's revenue growth has slightly outpaced the industry average of 4.4%. Since the same quarter one year prior, revenues rose by 13.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SBUX's debt-to-equity ratio is very low at 0.10 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.05, which illustrates the ability to avoid short-term cash problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, Starbucks' return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Starbucks has improved earnings per share by 27.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, Starbucks increased its bottom line by earning $1.79 vs. $1.62 in the prior year. This year, the market expects an improvement in earnings ($2.23 vs. $1.79).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Hotels, Restaurants & Leisure industry average. The net income increased by 25.5% when compared to the same quarter one year prior, rising from $332.90 million to $417.80 million.