Potbelly (PBPB) IPO Sends Shares Soaring

Joel Anderson |

Shares in sandwich maker Potbelly ($PBPB) soared in its first day of trading, welcoming the company to the street with a nearly 125 percent pop. The offering, led by Bank of American (BAC) and Goldman Sachs (GS) , priced shares at $14. This was higher than expected, but still proved to be too low as the stock took off as soon as trading began.

Investors Feast on Potbelly

Potbelly brought an attractive series of fundamentals to the table that clearly piqued interest for investors. Potbelly featured 286 locations in 18 states as of June 30, and expressed plans to increase the number of stores by 10 percent annually. What’s more, Potbelly saw last year’s revenue reach $274.9 million, a year-over-year increase of 16 percent. With average revenue growth over the last 5 years at 14 percent annually, Potbelly is well ahead of the industry average of between 2 and 3 percent.

Some see Potbelly’s prices, between $5 and $8 a sandwich, as making it very competitive in the market for people’s lunch dollars.

"The price of a meal at Potbelly is competitive," said Joe Pawlak, vice president of restaurant consultants Technomic. "Since Potbelly does not have table service, customers can save a few dollars not having to tip while also enjoying a sit-down experience. Potbelly is in the sweet spot of quick casual restaurants."

Pawlak continued, citing a warm atmosphere as well: "You don't mind staying and eating at Potbelly, unlike other sandwich shops," Pawlak said. "Also, the quality is as good or better than other casual restaurants."

 The IPO sold some 7.5 million shares at $14 apiece, up from the $12 to $13 a share the company had initially predicted, raising $105 million for the growing eatery.

Restaurant Chains a Popular Wall Street Play

Potbelly represents another in a line of eatery stocks that have been showing strong gains of late. Noodles & Co. (NDLS) had its IPO in June and is up almost 19 percent since that date. Mexican-inspired restraunts Chuy’s (CHUY) and Chipotle Mexican Grill (CMG) have posted strong gains this year, up 70 percent and 45 percent respectively since the start of 2013. 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Symbol Name Price Change % Volume
AISLF Asia Satl Tlcmm Hldgs Ord 1.41 0.00 0.00 0
BAC Bank of America Corporation 16.68 -0.23 -1.36 113,729,325
CHUY Chuy\'s Holdings Inc. 27.55 0.35 1.29 141,093
CMG Chipotle Mexican Grill Inc. 370.08 1.49 0.40 1,179,873
GS The Goldman Sachs Group Inc. 177.14 -0.61 -0.34 2,034,921
NDLS Noodles & Company 4.55 0.10 2.25 146,439
PBPB Potbelly Corporation 12.75 0.05 0.39 203,211


Emerging Growth


VOIP-PAL COM Inc is a development stage company. The Company is engaged in broadband Voice-over-Internet Protocol ("VoIP") market with the ownership and continuing development of a portfolio of VoIP Patents.

Private Markets


Our mission is to be the best place for people who care about music to create and discover thoughtfully curated playlists. In essence, 8tracks is a platform for online mixtapes.

Ozobot by Evollve Inc

Ozobot is a world leader in compact super intelligent robots that entertain and educate through fun interactive gaming.