For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in Jack In The Box (JACK) ten years ago? It may not have been easy to hold on to JACK for all that time, but if you did, how much would your investment be worth today?
Jack In The Box's Business In-Depth
With that in mind, let's take a look at Jack In The Box's main business drivers.
Based in San Diego, Jack in the Box Inc. is a restaurant company that operates and franchises through Jack in the Box quick-service restaurants, and is one of the nation’s largest hamburger chains. In 1951, the company opened its first restaurant and since then Jack in the Box has become the largest hamburger chains. On the basis of number of restaurants, the company’s top 10 markets comprise nearly 70% of the total system Jack in the Box is also the second largest QSR hamburger chain in nine of those 10 markets.
During the second quarter of 2020, the company acquired eight franchise restaurants as a result of a legal action filed in October 2019 against a franchisee. It received the judgment in January 2020, thereby granting possession of the restaurants. As of Jan 17, 2021, Jack in the Box system included 2,237 restaurants across 21 states and Guam. Notably, the company had 93% franchised restaurants.
Previously, the company operated under Jack in the Box quick-service restaurants and Qdoba Mexican Eats fast-casual restaurants.
In December 2017, the company signed an agreement to sell Qdoba to Apollo Global Management, LLC. On Mar 21, 2018, the company finally announced the sell-out of Qdoba Restaurant Corporation. Jack in the Box sold Qdoba to an affiliate of certain funds, managed by the affiliates of Apollo for roughly $305 million in cash. In connection to the sale, the terms of credit facility demand Jack in the Box to make a pre-payment of $260 million to retire outstanding debt under its term loan.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Jack In The Box, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in April 2011 would be worth $5,175.01, or a 417.50% gain, as of April 12, 2021, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 210.86% and gold's return of 15.30% over the same time frame.
Going forward, analysts are expecting more upside for JACK. Shares of Jack in the Box have outperformed the industry in the past three-month period. Recently, the company reported solid first-quarter fiscal 2020 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Moreover, the top and bottom lines improved 10% and 84.6%, respectively, on a year-over-year basis. Notably, the company has been benefiting from initiatives like regular menu innovation, increased focus on delivery channels and marketing strategies. Also, it is expanding its mobile application in a few markets that support order-ahead functionality and payment. This along with a focus on food packaging and portability is likely to boost customer experience in the upcoming periods. However, coronavirus-related woes persist. Due to the uncertainty concerning the pandemic, the company has not provided its fiscal 2021 guidance.
Over the past four weeks, shares have rallied 11.79%, and there have been 11 higher earnings estimate revisions in the past two months for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Jack In The Box Inc. (JACK) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research