It’s time to breakdown one of the most well-known pizza players! Here is the breakdown on $DPZ, otherwise known as Dominos Pizza.
Current Price: $385.88
52/Wk High: $435.58
52/Wk Low: $270.08
Market Cap: $15.3 billion
Dividend: $3.12 / 0.81% Yield
Read below for the breakdown!
Domino’s Pizza is one of the most well-known pizza restaurant chains in the United States with 85 markets around the world and 13,800 locations.
Throughout the COVID-19 pandemic ordering food has been a cornerstone in the public transition to the stay at home life. Given this, Dominos has capitalized on the opportunity to grow.
Taking a look at Domino’s most recent earnings numbers the company reported mixed results. Domino’s missed Q3 EPS expectations of $2.79, reporting an EPS of $2.49 (up 21.5% y/y).
On the flip side global retail sales grew 14.8% and US same-store sales grew 17.5% throughout the third quarter. Furthermore, international same-store sales grew by 6.2% and Dominos opened 83 new global net stores.
Taking a look at Domino’s record, the company has now reported international same-store sales growth for the 107th consecutive quarter in a row and US same-store sales growth for the 38th consecutive quarter in a row.
In total, Domino’s reported Q3 revenues of $146.9 million, representing a 17.9% increase in revenues throughout the third quarter. Management noted that the quarter’s growth was motivated by US retail sales.
On a final earnings note, the third quarter’s net income increased by 14.8% to $12.8 million. Management noted that this increase was mainly due to increased operating income and US sales.
Reviewing the numbers it is clear that Dominos is a clear and consistent winner simply based on earnings. Given the consistent growth, it’s hard to see the numbers slowing down anytime soon.
Taking a look at the balance sheet the numbers could use improvement.
Total Debt: $4.106 billion
Total Liabilities: $4.832 billion
Total Assets: $1.621 billion
Cash & Short Term Inv: $450 million
When it comes to the valuation $DPZ is pricy but not too far gone.
Price to Earnings: 33.10x
Price to Sales: 3.90x
Price to Cash Flow: 30.63x
On the flip side, management has been quite effective.
Return on Assets: 33.71%
Return on Invested Capital: 50.09%
Taking in the numbers the analysts remain very bullish with a mean price target of $443.38/share, representing a 14.90% gain.
It is also important to note that Domino’s high price target is $500.00/share, representing a 29.57% gain, while the low price target is $380.00/share, representing a -1.52% loss.
The big money is also very involved with 91.05% of Dominos being owned by institutions. Top holders include The Vanguard Group, Capital World Investors, and BlackRock Institutional Trust.
On a technical basis, Dominos seems to be presenting an opportunity. According to the six-month charts, the MACD is slowly moving to the upside within a tight range around -2.00.
The six-month charts are also indicating an RSI of 47.29 and CCI of -10.33, both of which are on the low end. It is also important to note that $DPZ currently trades roughly 50 points off its highs.
In short, Dominos seems to be a solid long term buy at its current price point given the pullback the stock has suffered over the last few months and long term history of consistent growth.
EAT - SLEEP - PROFIT
Disclaimer: This is not direct financial advice, simply an opinion based on independent research.