We first started coverage on the Pizza realm in November 2013, paying particular focus on Domino’s Pizza, Pizza Hut (Yum! Brands) and Papa Johns. Since this time, we’ve seen an appreciation in the stock price of 123%, 71% and 37% respectively. Not too shabby!
While it may not be entirely evident how search trends for Pizza shops have any impact at all on their financial fortunes, we remind readers that the Pizza business has enabled their customers to order online. Each of these Pizza shops have their own online ordering system, thus the more people navigating to the respective websites, the higher the probability of seeing orders increase. While online orders, in the case of PZZA, are not significant, it could be the case that users are navigating to the website as a menu reference before transactions are processed in the more traditional methods.
We’ve taken some time to revisit search trends and noted in the case of Domino’s, that search interest has stalled on a worldwide basis whereas search interest for Pizza Hut and Papa John’s appears to be continuing in a positive direction.
We also noted that search interest on a worldwide basis as well as in the United States continues to grow which should bode well for Pizza shops.
Taking what we will from the search trends, it would appear that online presence for Domino’s has been stagnating for the last 3 years, with a brief downward trend established during 2012. While we’re cautious to say that this will have a negative impact from a financial perspective, we are well aware it is one of the most expensive (from a P/E perspective) within its group.
Pizza Hut’s internet presence on the other hand has shown nothing but growth since 2004, however we remind those keen on taking a position in the company that Pizza Hut is part of a larger company Yum! Brands so it would be prudent to investigate further. Overall, Yum! should benefit from the fact that google search interest in Pizza as well as Pizza Hut is growing.
Papa John’s search interest continues to grow, albeit not as strong as Pizza Hut. Over the last few months, it appears that search interest has taken a bit of a hit, but without an established pattern, we would suggest keeping an eye on the trend for the time being.