DPZ

Domino's Pizza Stock - Fairly Priced With Poor Growth Indicators

Domino's Pizza shares moved -37.4% over the last 52 weeks, with a high of $564.73 and a low of $299.41. During this time, the stock lagged the S&P 500 index by -17.4%. As of January 2022, the company's 50-day average price is $357.4898. Domino's Pizza, Inc., through its subsidiaries, operates as a pizza company in the United States and internationally. The large-cap Consumer Cyclical company has 7,400 full time employees and is based in Ann Arbor, MI. Domino's Pizza has returned a 1.2% dividend yield over the last 12 months.

A Steady Stream of Strong Cash Flows But Excessive Leverage:

2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $3,619 $4,117 $4,357
Revenue Growth n/a 13.78% 5.83%
Gross Margins 38.8% 38.7% 38.7%
Gross Margins Growth n/a -0.26% 0.0%
Operating Margins 17.4% 17.6% 17.9%
Operating Margins Growth n/a 1.15% 1.7%
Earnings Per Share $9.56 $12.39 $13.54
EPS Growth n/a 29.6% 9.28%
Free Cash Flow (MM) $411 $504 $560
FCF Growth n/a 22.52% 11.11%
Capital Expenditures (MM) -$86 -$89 -$94
Net Debt / EBITDA 5.68 5.03 5.48

Domino's Pizza Has Elevated P/B and P/E Ratios:

Compared to the Consumer Cyclical sector's average of 24.11, Domino's Pizza has a trailing twelve month price to earnings (P/E) ratio of 28.0 and, based on its EPS guidance of 14.18, an expected P/E ratio of 24.4.

The firm's price to earnings growth (PEG) is 3.28, which indicates that it is overvalued in terms of its expected rate of earnings growth.

Domino's Pizza Has an Average Rating of Buy and an Analyst Consensus of Some Upside Potential:

28 analysts are following Domino's Pizza and have set target prices ranging from $315 to $460 per share. On average, they have given the company a rating of buy. At the current price of $346.4, DPZ is trading -9.66% away from its average analyst target price of $383.45 per share, implying an analyst consensus of some upside potential for the stock.

The company has an average amount of shares sold short since 5.7% of the company's shares are tied to short positions. Institutions own 93.8% of Domino's Pizza's shares, while the insider ownership rate stands at 0.58%. The biggest shareholder is the Vanguard Group, Inc. with a 11% stake in the company worth approximately $1,351,910,844.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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