Restaurant Brands International Inc. Common Shares (QSR)

FairStock Score: 51/100 — MIXED

Key Financials

Strengths

• Generates $1.4 billion in annual free cash flow (3.8% yield on market cap)
• High return on equity of 24.0% demonstrating efficient capital deployment
• Attractive 3.3% dividend yield providing steady income returns
• Established organization with 53,500 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($25) with negative 223% margin of safety—limited downside protection
• High leverage at 3.04x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of 1.4 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Restaurant Brands International Inc. Common Shares is a mid-cap consumer cyclical company valued at $36.7 billion. The business generates $9.4 billion in annual revenue with a 1.6% net margin and $1.4 billion in free cash flow. From a quality standpoint, Restaurant shows distressed Altman Z-Score of 1.4 warrants caution and strong 24% ROE. On valuation, the stock is trading at a premium 30.9x earnings, with trades far above its Graham Number ($25) with no margin of safety. Growth dynamics show revenue growing at 7.4% and profit growth of -56.4%. The 3.3% dividend yield adds an income component for patient holders. Our composite FairStock Score of 45/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $1.4 billion in annual free cash flow (3.8% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 31x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer