Value
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.5 |
| P/S | 8.0 |
| EV/EBITDA | 3.3 |
| Fwd P/E | 7.5 |
| PEG | 5.9 |
| Analyst target | 6.0 |
- ▸Forward P/E: 16.4x
- ▸PEG: 1.28
QSR · Why this verdict
Why Restaurant Brands International (QSR) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Restaurant Brands International combines strong momentum, an excellent free cash flow conversion of 173%, and positive news sentiment, but two consecutive earnings misses averaging -51% negative surprise and a stock already near its analyst price target with only 2.2% upside mean the risk-reward is unfavorable at the current price.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Converting 173% of net income into free cash flow and generating strong earnings growth, Restaurant Brands demonstrates a franchise model that produces cash well in excess of accounting earnings, supporting the company's ability to fund dividends and debt repayment. Quality breakdown | Free cash flow conversion remains above 150% in each of the next two reported annual periods. | →Stable |
| CounterA high debt-to-equity ratio triggers a leverage penalty, and the dividend yield appears unsustainable at current free cash flow levels per the yield trap warning in the data. | ||
Two consecutive earnings misses, including a -63.4% surprise in February 2026 when the company reported $0.34 against an estimate of $0.93, signal execution issues or structural headwinds that may persist into the next reporting period. Bear case | The company returns to earnings beats in at least 2 of the next 3 quarters. | →Stable |
| CounterThe most recent quarter showed a positive surprise of 4.0%, and the prior large miss may have been an isolated accounting or restructuring item rather than ongoing operational weakness. | ||
At $75.65 versus an analyst price target of $77.33, the stock offers only 2.2% upside with a 4.4% downside to the stop-loss level, producing a reward-to-risk ratio of 0.50 that fails to compensate for the earnings execution risk. Warnings | The analyst consensus target rises above $90 following restored earnings consistency, improving the upside potential above 15%. | →Stable |
| CounterIf the company continues delivering positive news sentiment and strong MACD momentum, analysts may revise targets upward, restoring a more favorable reward-to-risk profile without a price correction. | ||
The stock is above its 200-day moving average with a bullish MACD signal and rising on-balance volume, indicating that price momentum and volume accumulation are aligned in a positive direction, which historically precedes continued upward movement. Momentum breakdown | The stock sustains its position above the 200-day moving average for at least 6 consecutive months. | →Stable |
| CounterWith only 2.2% upside to the analyst target and a reward-to-risk ratio of 0.50, the positive momentum is already priced in and leaves no room for fundamental disappointment. | ||
Converting 173% of net income into free cash flow and generating strong earnings growth, Restaurant Brands demonstrates a franchise model that produces cash well in excess of accounting earnings, supporting the company's ability to fund dividends and debt repayment.
→StableQuality breakdown
- Expectation
- Free cash flow conversion remains above 150% in each of the next two reported annual periods.
CounterA high debt-to-equity ratio triggers a leverage penalty, and the dividend yield appears unsustainable at current free cash flow levels per the yield trap warning in the data.
Two consecutive earnings misses, including a -63.4% surprise in February 2026 when the company reported $0.34 against an estimate of $0.93, signal execution issues or structural headwinds that may persist into the next reporting period.
→StableBear case
- Expectation
- The company returns to earnings beats in at least 2 of the next 3 quarters.
CounterThe most recent quarter showed a positive surprise of 4.0%, and the prior large miss may have been an isolated accounting or restructuring item rather than ongoing operational weakness.
At $75.65 versus an analyst price target of $77.33, the stock offers only 2.2% upside with a 4.4% downside to the stop-loss level, producing a reward-to-risk ratio of 0.50 that fails to compensate for the earnings execution risk.
→StableWarnings
- Expectation
- The analyst consensus target rises above $90 following restored earnings consistency, improving the upside potential above 15%.
CounterIf the company continues delivering positive news sentiment and strong MACD momentum, analysts may revise targets upward, restoring a more favorable reward-to-risk profile without a price correction.
The stock is above its 200-day moving average with a bullish MACD signal and rising on-balance volume, indicating that price momentum and volume accumulation are aligned in a positive direction, which historically precedes continued upward movement.
→StableMomentum breakdown
- Expectation
- The stock sustains its position above the 200-day moving average for at least 6 consecutive months.
CounterWith only 2.2% upside to the analyst target and a reward-to-risk ratio of 0.50, the positive momentum is already priced in and leaves no room for fundamental disappointment.
Per-dimension breakdown
Quality
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 9.4 |
| ROA | 4.3 |
| Gross margin | 2.8 |
| Op margin | 10.0 |
| Net margin | 5.0 |
| Current ratio | 4.0 |
| FCF quality | 10.0 |
| Moat | 5.4 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 28%
- ▸Excellent cash conversion: 173% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
7.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.3 |
| EPS growth | 10.0 |
Momentum
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 6.8 |
| OBV | 5.2 |
| MA position | 4.0 |
| Volume | 0.0 |
- ▸Above 200-day MA
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 7.5 |
| erm sentiment | 5.3 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.6 |
| quality rank | 5.6 |
| growth rank | 4.0 |
Technical
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.6 |
| support resistance | 6.6 |
| 52w position | 7.8 |
Risk (lower is worse)
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.1 |
| days to cover | 5.6 |
| volatility | 7.1 |
| put call | 10.0 |
| implied vol | 7.0 |
| max pain risk | 7.0 |
| beta | 9.9 |
| debt equity | 2.0 |
Catalyst
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 3.2 |
| dividend safety | 4.2 |
- ▸Strong earnings: 3B/1M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:42d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.3<4.5
- ASYMMETRY:1.3<1.5@spot
Warning (0)
none
Reward-to-Risk
1.33
Upside
+6.6%
Downside
5.0%
Sizing output
AVOID
SetupRANGE_BOUND — RSI 55 mid-range, Bollinger mid-band
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 7.2) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.3<4.5, ASYMMETRY:1.3<1.5@spot) reinforce the read. Current asymmetry R:R is 1.33 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 7.2, Risk (lower is worse) at 7.0, and Sentiment at 6.9; the weakest are Momentum at 4.3, Peer rank at 4.6, and Catalyst at 4.8. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 1.33 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1The stock is above its 200-day moving average with a bullish MACD signal and rising on-balance volume, indicating that price momentum and volume accumulation are aligned in a positive direction, which historically precedes continued upward movement.
Trip ifThe stock price falls below its 200-day moving average for more than 10 consecutive trading days.
- P2Converting 173% of net income into free cash flow and generating strong earnings growth, Restaurant Brands demonstrates a franchise model that produces cash well in excess of accounting earnings, supporting the company's ability to fund dividends and debt repayment.
Trip ifFree cash flow conversion falls below 120% of net income in any reported annual period.
- P3Two consecutive earnings misses, including a -63.4% surprise in February 2026 when the company reported $0.34 against an estimate of $0.93, signal execution issues or structural headwinds that may persist into the next reporting period.
Trip ifEPS surprise falls below -20% in at least 2 of the next 4 quarters.
- P4At $75.65 versus an analyst price target of $77.33, the stock offers only 2.2% upside with a 4.4% downside to the stop-loss level, producing a reward-to-risk ratio of 0.50 that fails to compensate for the earnings execution risk.
Trip ifAnalyst consensus price target declines to below $70, more than 10% below the current price.