📊 YUM Key Takeaways
Is Yum Brands Inc. (YUM) a Good Investment?
YUM demonstrates strong operational fundamentals with 31.3% operating margin and positive free cash flow of $341M, but faces severe balance sheet distress with negative stockholders' equity of -$7.3B and critically tight interest coverage of 1.2x on $10.2B debt. The company's liquidity ratios of 0.65x and suspicious 1739.5% revenue growth paired with only 4.9% net income growth indicate structural financial fragility that outweighs operational strengths.
Yum Brands shows strong underlying profitability and cash generation, with a 31.3% operating margin, 19.0% net margin, and $1.64B of free cash flow on $8.21B of revenue. Net income and diluted EPS continued to grow, which supports the resilience of its asset-light, franchise-heavy model, but the balance sheet remains aggressive with negative equity and $11.83B of long-term debt. The very large reported revenue jump also raises a growth-quality question, making balance sheet discipline and cash conversion more important than top-line growth alone.
Why Buy Yum Brands Inc. Stock? YUM Key Strengths
- Strong operating margin of 31.3% and net margin of 21.0% indicates efficient operations and pricing power
- Positive free cash flow of $341M (16.6% FCF margin) demonstrates ability to generate cash despite balance sheet stress
- Operating cash flow of $416M provides near-term liquidity buffer despite current ratio concerns
- High-margin business model with 31.3% operating margin and 19.0% net margin
- Strong cash generation with $2.01B operating cash flow and $1.64B free cash flow
- Earnings growth remained positive, with net income up 4.9% and diluted EPS up 6.3%
YUM Stock Risks: Yum Brands Inc. Investment Risks
- Negative stockholders' equity of -$7.3B indicates technical insolvency; liabilities exceed assets by $7.3B
- Interest coverage of 1.2x is critically tight with minimal cushion for operational downturn or rate increases
- Liquidity crisis risk: current ratio and quick ratio both at 0.65x, indicating current liabilities exceed current assets by 35%
- Debt-to-assets ratio of 124% (10.2B debt vs 8.2B assets) shows overleveraged capital structure
- Highly suspicious revenue growth of 1739.5% YoY paired with only 4.9% net income growth suggests one-time items masking core business deterioration
- Elevated insider activity (49 Form 4 filings in 90 days) suggests potential information concerns
- Negative stockholders equity indicates an aggressively levered capital structure
- Long-term debt of $11.83B and interest coverage of 4.7x limit financial flexibility
- Revenue growth of 1739.5% YoY appears unusually large and may reflect reporting or mix changes rather than purely organic expansion
Key Metrics to Watch
- Quarterly interest coverage ratio stability and debt service sustainability
- Current ratio improvement and working capital management
- Operating cash flow consistency and free cash flow sustainability
- Debt reduction progress and refinancing capacity in current rate environment
- Organic revenue growth rates excluding one-time items
- Interest coverage and long-term debt reduction
- Free cash flow conversion relative to net income
Yum Brands Inc. (YUM) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The current ratio below 1.0x warrants monitoring of short-term liquidity.
YUM Profit Margin, ROE & Profitability Analysis
YUM vs Consumer Sector: How Yum Brands Inc. Compares
How Yum Brands Inc. compares to Consumer sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Yum Brands Inc. Stock Overvalued? YUM Valuation Analysis 2026
Based on fundamental analysis, Yum Brands Inc. has mixed fundamental signals relative to the Consumer sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Yum Brands Inc. Balance Sheet: YUM Debt, Cash & Liquidity
YUM Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Yum Brands Inc.'s revenue has grown significantly by 25% over the 5-year period, indicating strong business expansion. The most recent EPS of $5.59 reflects profitable operations.
YUM Revenue Growth, EPS Growth & YoY Performance
YUM Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $1.8B | $253.0M | $0.90 |
| Q3 2025 | $1.8B | $382.0M | $1.35 |
| Q2 2025 | $1.8B | $367.0M | $1.28 |
| Q1 2025 | $1.6B | $253.0M | $0.90 |
| Q3 2024 | $1.7B | $382.0M | $1.35 |
| Q2 2024 | $1.7B | $367.0M | $1.28 |
| Q1 2024 | $1.6B | $300.0M | $1.05 |
| Q3 2023 | $1.6B | $331.0M | $1.14 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Yum Brands Inc. Dividends, Buybacks & Capital Allocation
YUM SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Yum Brands Inc. (CIK: 0001041061)
📋 Recent SEC Filings
❓ Frequently Asked Questions about YUM
What is the AI rating for YUM?
Yum Brands Inc. (YUM) has a Combined AI Rating of SELL from Claude (SELL) and ChatGPT (HOLD) with 81% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are YUM's key strengths?
Claude: Strong operating margin of 31.3% and net margin of 21.0% indicates efficient operations and pricing power. Positive free cash flow of $341M (16.6% FCF margin) demonstrates ability to generate cash despite balance sheet stress. ChatGPT: High-margin business model with 31.3% operating margin and 19.0% net margin. Strong cash generation with $2.01B operating cash flow and $1.64B free cash flow.
What are the risks of investing in YUM?
Claude: Negative stockholders' equity of -$7.3B indicates technical insolvency; liabilities exceed assets by $7.3B. Interest coverage of 1.2x is critically tight with minimal cushion for operational downturn or rate increases. ChatGPT: Negative stockholders equity indicates an aggressively levered capital structure. Long-term debt of $11.83B and interest coverage of 4.7x limit financial flexibility.
What is YUM's revenue and growth?
Yum Brands Inc. reported revenue of $2.1B.
Does YUM pay dividends?
Yum Brands Inc. pays dividends, with $207.0M distributed to shareholders in the trailing twelve months.
Where can I find YUM SEC filings?
Official SEC filings for Yum Brands Inc. (CIK: 0001041061) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is YUM's EPS?
Yum Brands Inc. has a diluted EPS of $1.55.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is YUM a good stock to buy right now?
Based on our AI fundamental analysis in May 2026, Yum Brands Inc. has a SELL rating with 81% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is YUM stock overvalued or undervalued?
Valuation metrics for YUM: ROE of N/A (sector avg: 18%), net margin of 21.0% (sector avg: 8%). Compare these metrics with sector averages to assess valuation.
Should I buy YUM stock in 2026?
Our dual AI analysis gives Yum Brands Inc. a combined SELL rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is YUM's free cash flow?
Yum Brands Inc.'s operating cash flow is $416.0M, with capital expenditures of $75.0M. FCF margin is 16.6%.
How does YUM compare to other Consumer stocks?
Vs Consumer sector averages: Net margin 21.0% (avg: 8%), ROE N/A (avg: 18%), current ratio 0.65 (avg: 1.5).