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What this page is: Delvantic's full research page for Yum! Brands, Inc. (YUM) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-08-23): Designation Low · Gem Score -16 (−100…+100 Quality+Value blend) · Quality 60 · Value -78 · Sentiment 1 (timing only, not weighted) · Composite fair value $123.75 vs $148.92 at analysis
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profile-header/price-overview— company profile, live quote, market capextended-analysis— the core: three AI lens reads with findings, scores, and the analyst memofuture-predictions— our forward price-band predictionsmarket-narrative/ai-findings/gpt-critique— narrative context, cross-model findings, and an adversarial critique of our own analysis (near the end of the document)- Members-only sections (render as login gates for anonymous readers):
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Yum! Brands, Inc.
YUM NYSEYum! Brands, Inc. is a global quick-service restaurant company that develops, operates, franchises, and licenses a large system of branded restaurants worldwide. The company oversees well-known concepts including KFC, Taco Bell, Pizza Hut, and The Habit Burger Grill, primarily focused on chicken, Mexican-inspired food, pizza, and better-burger offerings. Through a predominantly franchised model, Yum! Brands concentrates on brand management, menu innovation, marketing, and operational support, while franchisees handle most day-to-day restaurant operations. This structure positions the company as a major player in the consumer services and restaurant industry, with substantial presence across both developed and emerging markets. Headquartered in Louisville, Kentucky, and founded in 1997, Yum! Brands today plays a central role in global quick-service dining, serving a wide range of customers through dine-in, takeaway, drive-thru, and delivery channels across numerous countries and territories.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 5.55
Total Equity: -$7.33B
Shares: 280,900,901
Total Debt: $13.19B
Cash: $709.00M
EBITDA: $2.75B
Total Debt: $13.19B
Cash: $709.00M
Revenue: $8.21B
Revenue: $8.21B
Revenue: $8.21B
Total Equity: -$7.33B
Tax Rate: 24.9%
Equity: -$7.33B
Total Debt: $13.19B
Cash: $709.00M
Current Liabilities: $1.52B
Long-Term Debt: $13.05B
Total Debt: $13.19B
Total Equity: -$7.33B
Shares: 280,900,901
Shares: 280,900,901
CapEx: -$371.00M
Shares: 280,900,901
Stock Price: $148.92
Net Income: $1.56B
Industry Benchmarks
Income Statement (Annual)
Last updated: Jul 27, 2026 12:42am (27d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $6.6B | $6.8B | $7.1B | $7.5B | $8.2B |
| Cost of Revenue | $3.4B | $3.5B | $3.6B | $4.0B | $4.4B |
| Gross Profit | $3.2B | $3.3B | $3.5B | $3.6B | $3.8B |
| Operating Expenses | $1.1B | $1.1B | $1.2B | $1.2B | $1.3B |
| Operating Income | $2.1B | $2.2B | $2.3B | $2.4B | $2.5B |
| Net Income | $1.6B | $1.3B | $1.6B | $1.5B | $1.6B |
| EBITDA | $2.3B | $2.3B | $2.5B | $2.6B | $2.7B |
| EPS | $5.30 | $4.63 | $5.68 | $5.28 | $5.59 |
| EPS (Diluted) | $5.21 | $4.57 | $5.59 | $5.22 | $5.55 |
Balance Sheet (Annual)
Last updated: Jul 27, 2026 12:14am (27d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $486.0M | $367.0M | $512.0M | $616.0M | $709.0M |
| Total Current Assets | $1.5B | $1.6B | $1.6B | $1.9B | $2.0B |
| Total Assets | $6.0B | $5.8B | $6.2B | $6.7B | $8.2B |
| Current Liabilities | $1.4B | $1.7B | $1.3B | $1.3B | $1.5B |
| Long-Term Debt | $12.0B | $12.2B | $11.9B | $12.2B | $13.0B |
| Total Liabilities | $14.3B | $14.7B | $14.1B | $14.4B | $15.5B |
| Total Equity | -$8.4B | -$8.9B | -$7.9B | -$7.6B | -$7.3B |
| Retained Earnings | -$8.0B | -$8.5B | -$7.6B | -$7.3B | -$7.0B |
Cash Flow (Annual)
Last updated: Jul 27, 2026 12:42am (27d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $1.7B | $1.4B | $1.6B | $1.7B | $2.0B |
| Capital Expenditure | -$230.0M | -$279.0M | -$285.0M | -$257.0M | -$371.0M |
| Free Cash Flow | $1.5B | $1.1B | $1.3B | $1.4B | $1.6B |
| Acquisitions (net) | $0 | $0 | — | — | — |
| Net Debt Issued / (Repaid) | $493.0M | $300.0M | -$397.0M | -$242.0M | $527.0M |
| Dividends Paid | -$592.0M | -$649.0M | -$678.0M | -$752.0M | -$789.0M |
| Stock Buybacks | -$1.6B | -$1.2B | -$50.0M | -$441.0M | -$552.0M |
| Net Change in Cash | -$253.0M | -$124.0M | $77.0M | $83.0M | $116.0M |
Growth Trends (YoY %)
Last updated: Jul 27, 2026 12:42am (27d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +3.9% | +3.4% | +6.7% | +8.8% |
| Gross Profit Growth | +4.5% | +5.7% | +2.5% | +5.8% |
| Operating Income Growth | +2.9% | +6.3% | +4.3% | +5.3% |
| Net Income Growth | -15.9% | +20.5% | -7.0% | +4.9% |
| EBITDA Growth | +0.5% | +7.4% | +4.3% | +6.8% |
Dividend History (Last 20)
Last updated: Jul 25, 2026 3:26am (29d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-05-27 | $0.75 | — | — | — |
| 2026-02-20 | $0.75 | — | — | — |
| 2025-12-02 | $0.71 | — | — | — |
| 2025-09-02 | $0.71 | — | — | — |
| 2025-05-27 | $0.71 | — | — | — |
| 2025-02-21 | $0.71 | — | — | — |
| 2024-12-02 | $0.67 | — | — | — |
| 2024-08-27 | $0.67 | — | — | — |
| 2024-05-24 | $0.67 | — | — | — |
| 2024-02-20 | $0.67 | — | — | — |
| 2023-11-27 | $0.61 | — | — | — |
| 2023-08-28 | $0.61 | — | — | — |
| 2023-05-26 | $0.61 | — | — | — |
| 2023-02-21 | $0.61 | — | — | — |
| 2022-11-23 | $0.57 | — | — | — |
| 2022-08-26 | $0.57 | — | — | — |
| 2022-05-26 | $0.57 | — | — | — |
| 2022-02-17 | $0.57 | — | — | — |
| 2021-11-24 | $0.50 | — | — | — |
| 2021-08-26 | $0.50 | — | — | — |
Deep Analysis
Risk : Reward — if the last quarter repeats
Live · as of 2026-08-19 11:20Recovery pays +13%; another quarter like the worst recent one costs 17%. Ratio 0.8:1.
| Case | Growth | Margin | Fair value | vs price ($148.92) |
|---|---|---|---|---|
| Bull — recovery | +14% | 29.2% | $168.20 | +13% |
| Base — stabilizes | +9% | 25.4% | $128.24 | -14% |
| Bear — keeps slipping | +5% | 21.6% | $95.74 | -36% |
| Stress — last quarter repeats | +6% | 26.8% | $124.04 | -17% |
Narrative Economics
market-narrative step).
Claude Reading
Looking at the raw numbers first: YUM's revenue trajectory is fine but unspectacular — 2025 full-year $8.21B vs $7.55B (+8.7%), and the 4-year CAGR of 7.7% is respectable for a mature QSR. But net income tells a different story: $1.56B in 2025 vs $1.58B in 2021 — zero earnings growth over four years despite revenue up 25%. The quarterly margin trajectory is genuinely concerning: net margin ran 24-25% in mid-2023, compressed to 20-21% through 2024, then collapsed to 14.2% in Q1 2025. That's not noise; that's a 1000+ bps deterioration. Operating margin at 30.8% is still healthy for a royalty model, but the gap between operating and net margin has widened — suggesting interest burden on the $13.2B debt stack is biting. FCF at $1.64B on $41B market cap is a 4% yield, and the dividend takes ~50% of it.
The pre-flight framing of YUM as a "franchise-platform-royalty" business is directionally right but overstates the case. A true royalty business shouldn't see 400+ bps of net margin compression in a stable macro. The 46% gross margin (not 48%+) and the fact that Q1 2025 margins cratered while revenue grew tells me either (a) the franchisee base is under real stress and YUM is absorbing some of it via incentives/refranchising costs, or (b) there's a mix shift toward company-operated stores that dilutes the royalty-model purity. Either way, the "capital-light compounding machine" story is being tested right now. The negative $7.3B equity is a financial engineering artifact (buybacks + dividends funded by debt), not a red flag on its own — but it does mean any operational stumble hits equity holders directly with no cushion.
I largely agree with the Synthesis verdict that YUM is fully priced, but I think the $115 fair value may still be generous, not conservative. At 26.8x trailing P/E on flat-to-declining earnings, YUM is trading like a growth compounder while delivering the earnings profile of a bond proxy. Peers: MCD trades at ~25x with better unit economics and a cleaner balance sheet; QSR at ~20x. The narrative model's "moderate durability, anchored" framing is fair, but the bear case is underweighted — if Q1 2025's 14.2% net margin is the new run-rate rather than a one-off, then 2025 full-year NI of $1.56B is optimistic and forward earnings power is closer to $1.2-1.3B, which puts the multiple at 32-34x on normalized earnings. That's untenable. The contrarian counter is that Q1 is seasonally weakest and there may be one-time items (refranchising, impairments, FX) I can't see in this data — which is exactly the kind of thin-data problem to flag.
The insider activity is uniformly sell-side (option exercises followed by immediate sales, no open-market buys), the macro signal is "headwinds," and consumer cyclicals broadly are wrestling with trade-down and value-menu wars (see MCD's own commentary). None of that supports paying a premium multiple. The bull case requires believing Taco Bell momentum + China KFC reacceleration can restore 20%+ net margins — plausible but unproven, and Q1 2025 argues against it. I dissent mildly with the "-22.4% overvalued" precision (DCF fair values are false-precision on franchise platforms), but I agree with the direction: this is not a buy at $149. Fair value in the $115-125 range assuming margins recover partway; $95-105 if Q1 margins persist. I'd want to see two clean quarters of margin stabilization above 18% before touching it, and I'd want the entry closer to $125 for a starter.
GPT Reading
What jumps out to me is not a broken business, but a business whose valuation has drifted well ahead of what its income statement is proving. Yum’s top line has been solid: annual revenue rose from $6.58B in 2021 to $8.21B in 2025, and the quarterly cadence shows genuine growth, with Q1 revenue up from $1.60B to $1.79B year over year and the last four quarters summing to roughly $7.74B before the latest annual print reaches $8.21B. The problem is that nearly all of that growth has converted into very little bottom-line expansion. Net income was $1.58B in 2021, $1.60B in 2023, and only $1.56B in 2025. That is the core fact here. This is still a high-quality, capital-light franchised restaurant platform with $2.01B of operating cash flow and $1.64B of free cash flow on just $371M of capex, but it is no longer demonstrating the kind of earnings compounding that justifies paying almost 27x trailing earnings and nearly 20x EBITDA.
The margin profile is the second key issue, but I read it a bit differently than Opus. Yes, quarterly net margins have deteriorated meaningfully from 24.8% and 24.4% in mid-2023 to 20.8%, 20.9%, 17.9%, and then 14.2% in Q1 2025. That is a real decline, not a rounding error. But I do not think the right framing is “collapse” as though 14.2% establishes a new economic reality for the model. The annual numbers are weaker, but not catastrophic: operating income improved from $2.30B in 2023 to $2.40B in 2024 and $2.53B in 2025, while net income slipped only from $1.60B to $1.49B to $1.56B. That pattern says the business engine is still growing at the operating line, while below-the-line leakage—interest expense, taxes, and possibly one-off items—is muting EPS power. With $13.19B of debt and just $709M of cash, leverage is plainly a constraint, and the negative $7.33B equity means shareholders are long a heavily engineered capital structure, not a fortress balance sheet. But the data do not prove the franchise model itself is deteriorating; they prove equity holders are paying a premium multiple on a leveraged cash-yield story that has lost earnings efficiency.
On Opus’s specific claims, I agree with the central verdict and disagree with some of the diagnostic leaps. I agree when Opus argues YUM is “fully priced” and “not a buy at $149.” On the numbers, that is right: a $41.05B market cap against $1.64B of free cash flow is only about a 4.0% FCF yield, and a 1.96% dividend yield is not enough to compensate for balance-sheet leverage and flat multi-year earnings. I also agree with Opus that the negative equity is not itself a red flag; for this kind of franchisor, it is mostly the residue of buybacks and distributions. But I disagree with the claim that “a true royalty business shouldn’t see 400+ bps of net margin compression in a stable macro,” because net margin is exactly where financing and tax structure distortions show up. If the concern is model purity, operating margin is the cleaner test, and annual operating margin remains about 30.8%, which is still elite. I also disagree with Opus’s suggestion that Q1 margin pressure implies either franchisee stress absorption or a mix shift toward company-operated stores. That is possible, but the provided data do not establish either. What the data do establish is that operating profit rose $130M from 2024 to 2025 while net income rose just $70M, which points me first to financing drag rather than operational degradation.
I also think Opus leans too hard on the idea that “if Q1 2025’s 14.2% net margin is the new run-rate” the stock becomes obviously untenable at 32-34x normalized earnings. The sentence is arithmetically fine, but analytically it overweights one quarter in a business with visible quarterly seasonality: Q1 was $253M of net income on $1.79B revenue, while the three prior quarters delivered $367M, $382M, and $423M. I would not annualize the trough quarter any more than I would annualize Q4’s stronger 17.9% margin. Where I do agree strongly with Opus is on the broader message: even giving Yum the benefit of seasonal normalization, the market is valuing it like a dependable compounding franchise while the evidence shows a dependable revenue grower with stagnant per-dollar profitability. That is too expensive. A mature franchisor with revenue growth around high single digits but no meaningful earnings growth should not command nearly 27x trailing earnings unless there is cleaner proof that margin pressure is temporary and debt service will not keep siphoning off operating gains.
A careful skeptic of both my view and Opus’s would say we are both over-reading income-statement noise without segment detail. They would point out that Yum’s cash generation remains strong, the payout ratio around 50% is manageable, current ratio at 1.35 is adequate, and the market may be correctly looking through transient FX, tax, or refranchising items toward a business that can still grow system sales and buy back stock. They would also say that comparing negative equity or leverage to industrial standards misses the economics of franchised restaurant systems. That skeptic is right to reject drama. But even under that friendlier reading, $148.92 already discounts a return to better earnings conversion, and I do not see enough in the reported numbers to pay up in advance for that recovery.
Grok Reading
grok-critique step) alongside the other Big-3 seats, when a
report is run on this ticker.
Advanced Analysis Forensic deep-dive · separate lenses
Yum is a mature, franchise-model earner throwing off durable cash: revenue grew from $6.58B (2021) to $8.21B (2025), a ~5.7% CAGR, while FCF expanded from $1.48B to $1.64B and OCF/NI of 1.12x with accruals at -2.5% of assets signals real, cash-backed earnings (Beneish M -2.58 corroborates). Operating margins have held in a tight 30.8%-32.5% band and gross margin 46-49%, characteristic of a royalty-driven business with genuine pricing power and scale across KFC, Taco Bell, and Pizza Hut. Diluted share count fell from 302.3M to 280.9M (-1.8% CAGR) with buybacks at 975% of SBC — management is a disciplined net buyer, concentrating per-share value. The blemish is the balance sheet: net cash is -$12.48B against just $709M liquid, a deliberate lever-and-return capital structure common to franchisors but leaving zero cushion. Altman Z of 2.49 sits in the grey zone, consistent with high structural leverage rather than distress given $1.6B+ annual FCF easily services it. Margins have drifted modestly lower (OpM 32.5 to 30.8, GM 49.4 to 46.2 over two years), worth watching but not alarming. Insider tape is routine option-exercise-and-sell with zero open-market buys - neutral, not a signal.
Verify before trusting this (5)
- Debt maturity schedule and weighted-average interest rate on the $12.48B gross debt load
- Whether recent margin compression is FX, refranchising mix, or Pizza Hut/KFC same-store softness (segment detail in 10-K)
- Franchisee health metrics (unit closures, remodels behind plan) especially Pizza Hut U.S. and KFC China exposure via Yum China royalty
- Any off-balance-sheet guarantees or operating lease obligations that add to effective leverage
- Capital return policy - dividend plus buyback commitment vs. FCF coverage under a downside scenario
The e2e composite FV of $113.71 and signal-adjusted FV of $115.55 both sit roughly 22-24% below the $148.92 price. Two of three methods agree the stock is dear: DCF at $112.19 and EPV floor at $88.88. Only the anchored-PE method ($141.56) gets close, and even that is still below spot. Earnings quality is high (score 2), so no haircut is warranted, but that also means there is no hidden cash-generation kicker to argue the FVs are too low. Franchise quality is real and lifts deserved value, but that is already reflected in the anchored-PE and generous DCF terminal assumptions. To justify $149 you need to believe in sustained 4-5% revenue growth with 25%+ incremental margins across mature developed markets, which the bear case correctly flags as heroic given franchisee margin pressure. Net: a good business the market fully understands and then some. Margin of safety is negative; this is a Rich, not an Overvalued, because the quality and buyback cadence provide some downside cushion.
Verify before trusting this (4)
- Same-store sales trajectory at KFC US and Pizza Hut US - deteriorating comps would collapse the anchored-PE case
- Franchisee-level profitability commentary in transcripts to test the 4-5% unit growth assumption
- Forward guidance on operating margin and capital return pace
- Emerging-market unit economics disclosures given the growth thesis rests here
The macro tape is mildly risk-off (regime score -24, VIX 18.6, S&P off recent highs, 10y at 4.71%), but YUM's 0.56 beta and defensive QSR-royalty profile mute that pressure meaningfully. This is exactly the kind of name that gets marked down last in a stress tape and lifted last in a rally - the macro pushes on it with maybe half the force it applies to the broader market. Higher rates are a mild valuation headwind for any 20x+ multiple stock, but YUM's predictable royalty stream is closer to a bond-proxy than a cyclical, so the rates channel is muted rather than sharp. The active narrative is a 'platform-monopoly' franchise-compounder story of moderate intensity and moderate durability, with low cult coefficient - meaning there is no euphoric bid propping the stock up, but also no fading story crumbling underneath it. The market is paying a ~29% premium to DCF for the franchise-durability belief; that premium is quietly supported by the archetype but not aggressively defended by momentum or a hot narrative. Price action is modestly positive (7.7% CAGR) but decelerating (-3.6pp over 3 years), which suggests the story is intact but tiring - neither a tailwind nor a fresh headwind. Net: sentiment pressure on THIS name is close to neutral, with a slight defensive tilt in a shaky tape offset by an aging narrative and no analyst-tone catalyst visible.
Verify before trusting this (5)
- Any downward revisions to same-store-sales guidance from KFC/Taco Bell/Pizza Hut segments that would crack the franchise-durability story
- Analyst target revisions - a wave of downgrades would flip the read to Headwind
- VIX behavior - if VIX pushes above 22 and regime shifts to risk-off proper, even low-beta names begin to get marked
- Emerging-market unit-growth data (esp. China/India) which is the bull story's load-bearing pillar
- GLP-1 or health-narrative flare-ups that could re-rate the whole QSR cohort
This lens hasn't been run for this ticker yet.
When we made this prediction on Jul 27, 2026, YUM was $148.92. We expect it to be $140.80 by Jan 2027, and we consider it great value under $118.00. This is an early model (v0.6.0) — the direction is more reliable than the exact price. Made Jul 27, 2026.
Blue is our prediction, starting the day we made it. Grey is a slower route to the same place — the same destination, taking longer. Black is the actual price, so you can see how we are doing.