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Panera Bread Company Message Board

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  • techstrategy techstrategy Nov 18, 2011 4:32 PM Flag

    Cabal colluding here... No matter... It will break down soon enough...

    I will be posting more over the coming month... Just as was the case with NFLX, LULU and GMCR, I am probably a little early. But, as you've seen with those, I will be here for the descent.

    Part of the issue is macro. Growth stocks as a class are going to get hit. The reason Apple and Google won't is that they are hypergrowth trading at multiples less about 1/2 to 1/3 of Panera ex-cash... Companies like this with high fixed cost structures (the nature of retail) and modest margins without huge cash positions will be significantly more vulnerable to a downturn. The impact is non-linear, so to speak.

    If you step back and think about the big picture in historical terms, aside from the short squeeze manipulation that propped up all the little MOMO "growth" companies, why would one choose to hold PNRA trading at 32TTM that is tremendously exposed to US consumer weakness rather than a large cap company with lots of cash, a lower TTM and FE multiple and international leverage?

    A 30TTM multiple for a company like this IS a bubble valuation by historical standards. When one is close to peak earnings (and I definitely believe PNRA is close to peak), it makes it even more risky...

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