Domino's Pizza (DPZ) AI Stock Analysis

• Market Cap: $14.97B
• Dividend Yield: 1.46%
• Average Volume (3M): 751.78K
• Price to Earnings (P/E): 26.1
• Beta (1Y): 1.00
• Revenue Growth: 5.07%
• EPS Growth: 13.74%
• Country: US
• Employees: 6,400
• Sector: Consumer Cyclical
• Sector Strength: 55
• Industry: Restaurants
• EPS (TTM): 16.69
• Shares Outstanding: 34,297,040
• 10 Day Avg. Volume: 751,848
• 30 Day Avg. Volume: 751,780
• PEG Ratio: 1.90
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.36
• Price to Cash Flow (P/CF): 22.20
• P/FCF Ratio: 17.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $487.27
• Price Target Upside: 6.78% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 24

Domino's Pizza shows strong revenue growth and operational efficiency, supported by strategic leadership changes. However, financial risks due to high leverage and negative equity, along with potential overvaluation, present challenges. The stock benefits from positive technical indicators and a strong earnings outlook, but these are tempered by macroeconomic pressures and competitive challenges.

Positive Factors

Market Position

Domino's Pizza is maintaining its position as the pizza value leader, leveraging transaction drivers like Uber Eats rollout, loyalty relaunch benefits, and new product innovation, which have contributed to market share gains.

Operational Improvements

DPZ's more aggressive sales driving approach and operational improvements are expected to lead to share gains and earnings upside.

Partnerships

Domino's announced the much anticipated partnership with DoorDash, expected to be a meaningful catalyst to reaching the $1B of incremental revenue from third-party aggregators.

Negative Factors

Core Business Challenges

The guidance of retail sales and unit growth below LT algorithm for 2025 and 2026, the lower than expected franchisees' profitability and the further contraction of the ‘core’ delivery business underpin the long-lasting challenges of the business.

Macroeconomic Challenges

U.S. comps fell short of consensus and were pressured by macroeconomic challenges affecting low-income consumers.

Sales Growth Expectations

Reflecting on the bleak outlook and continued macro pressures, sales growth expectations are moderated.

Domino's Pizza Business Overview & Revenue Model

Company Description

Domino's Pizza, Inc. (DPZ) is a leading global pizza delivery and carryout chain, headquartered in Ann Arbor, Michigan, USA. Founded in 1960, the company operates in the quick-service restaurant sector, focusing primarily on pizza, but also offering a variety of other food items such as pasta, chicken, sandwiches, and desserts. Domino's is known for its extensive network of franchised and company-owned stores across numerous countries, making it one of the most recognized pizza brands in the world.

How the Company Makes Money

Domino's Pizza generates revenue primarily through three main streams: sales from company-owned stores, royalty and franchise fees from franchised stores, and supply chain operations. Company-owned store sales come from direct pizza and food sales to consumers. The majority of its stores are franchised, and Domino's earns money from these stores through royalty fees, which are a percentage of the franchisee's sales, and franchise fees, which are paid by franchisees to open and operate stores under the Domino's brand. Additionally, Domino's operates a supply chain segment, providing dough, toppings, and other food ingredients to its stores, which contributes significantly to its revenues. The company benefits from significant economies of scale and efficiencies in its supply chain operations, which enhance profitability. Strategic partnerships and technological innovations, such as its digital ordering platforms and delivery tracking systems, further bolster its revenue by enhancing customer convenience and engagement.

Domino's Pizza Financial Statement Overview

Summary

Domino's Pizza demonstrates strong revenue growth and profitability, with efficient operations and consistent cash flow generation. However, high leverage and negative equity pose significant financial risks, impacting long-term financial stability.

Income Statement

Domino's Pizza has shown strong revenue growth from $3.62 billion in 2019 to $4.71 billion in 2024, with a revenue growth rate of 5.08% from 2023 to 2024. The gross profit margin remains robust at 39.3% for 2024. However, net profit margin stands at 12.41%, showing stability but indicating potential room for improvement in managing costs. EBIT and EBITDA margins both reflect solid operational efficiency at 18.68%. Overall, the income statement reveals strong growth and profitability, though cost management could be further optimized.

Balance Sheet

The balance sheet indicates high leverage with a debt-to-equity ratio that is not calculable due to negative equity, reflecting potential financial risk. Return on equity is not computable due to negative equity, and the equity ratio is negative, suggesting significant liabilities compared to assets. Despite strong revenue, the company's high debt levels and negative equity pose financial stability concerns.

Cash Flow

Cash flow analysis shows consistent free cash flow generation, with a free cash flow growth rate of 5.47% from 2023 to 2024. The operating cash flow to net income ratio is 1.07, indicating good cash generation relative to earnings. Furthermore, the free cash flow to net income ratio is 0.88, demonstrating effective cash conversion. While operating cash flow is strong, the company faces high net debt levels, which could impact future cash flow flexibility.

Breakdown
Dec 2024	Dec 2023	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
4.71B	4.48B	4.54B	4.36B	4.12B
	Gross Profit
1.85B	1.73B	1.65B	1.69B	1.59B
	EBIT
879.00M	819.52M	767.92M	780.41M	725.64M
	EBITDA
1.01B	929.55M	851.34M	890.43M	790.68M
	Net Income Common Stockholders
584.17M	519.12M	452.26M	510.47M	491.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
186.13M	114.10M	60.36M	148.16M	168.82M
	Total Assets
1.74B	1.67B	1.60B	1.67B	1.57B
	Total Debt
5.20B	5.21B	5.25B	5.29B	4.36B
	Net Debt
5.01B	5.10B	5.19B	5.14B	4.19B
	Total Liabilities
5.70B	5.75B	5.79B	5.88B	4.87B
	Stockholders Equity
-3.96B	-4.07B	-4.19B	-4.21B	-3.30B
Cash Flow		Free Cash Flow
512.01M	485.47M	388.08M	560.03M	504.03M
	Operating Cash Flow
624.90M	590.86M	475.32M	654.21M	592.79M
	Investing Cash Flow
-31.23M	-106.92M	-53.68M	-142.72M	-128.93M
	Financing Cash Flow
-532.22M	-476.36M	-515.95M	-522.83M	-446.41M

Domino's Pizza Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 456.35
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DPZ, the sentiment is Positive. The current price of 456.35 is above the 20-day moving average (MA) of 454.02, below the 50-day MA of 460.19, and above the 200-day MA of 440.52, indicating a neutral trend. The MACD of 0.99 indicates Negative momentum. The RSI at 53.03 is Neutral, neither overbought nor oversold. The STOCH value of 49.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DPZ.

Domino's Pizza Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QSR	79 Outperform	$39.92B	20.30	34.17%	3.96%	21.63%	-14.75%
MCD	76 Outperform	$217.35B	26.68	-216.57%	2.29%	1.67%	-1.61%
YUM	73 Outperform	$40.45B	27.80	-19.43%	1.92%	6.68%	-7.09%
DPZ	68 Neutral	$14.97B	26.15	-14.74%	1.46%	5.07%	13.74%
PZZA	63 Neutral	$1.11B	13.34	-20.16%	5.72%	-3.57%	2.31%
WING	61 Neutral	$6.17B	59.73	-16.09%	0.46%	36.03%	57.51%
Sector *	59 Neutral	$11.74B	10.16	-1.06%	4.15%	1.27%	-16.61%

Domino's Pizza Corporate Events

Domino’s Pizza Promotes Joseph H. Jordan to COO

On March 10, 2025, Domino’s Pizza announced the promotion of Joseph H. Jordan to Chief Operating Officer and President of Domino’s U.S., effective immediately. This move is part of a broader organizational shift aimed at enhancing agility and aligning teams to drive the company’s ‘Hungry for MORE’ strategy more effectively. Alongside Jordan, Weiking Ng and Ryan Mulally were also promoted to executive vice president roles, further strengthening Domino’s leadership team. These changes are expected to positively impact the company’s operations and strategic execution, reinforcing its position in the global market.

Domino’s Pizza Board Member Diana F. Cantor Retires

Diana F. Cantor, after nearly two decades on Domino’s Pizza’s Board of Directors, announced her retirement and will not seek reelection at the 2025 Annual Meeting of Shareholders in April. Her departure marks the end of a significant tenure, during which she contributed greatly to the company’s strategic direction.