Domino's Pizza (DPZ) AI Stock Analysis

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Domino's Pizza

(NASDAQ:DPZ)

77Outperform

Domino's Pizza demonstrates strong financial and technical performance, supported by strategic initiatives. While the company faces challenges like high leverage and operational pressures, its robust growth and positive momentum position it well for the future. The stock is fairly valued, and recent strategic moves could further enhance its market position.

Positive Factors

Partnerships

The rollout and integration with DoorDash are expected to support healthy growth in the delivery channel.

Product Launch

Management expects strong market share gains driven by the launch of new products and partnerships, such as the stuffed crust pizza and DoorDash platform, which could provide significant growth opportunities.

Promotions

The 'Best Deal Ever' promotion, offering value-driven pricing, has been successful, highlighting Domino's ability to attract consumers with compelling offers even in a tough economic climate.

Negative Factors

Comparable Sales

Negative US Comps miss expectations, though a stronger trend expected as management remained confident in the 3% guide.

EBIT Performance

The company's EBIT percentage declined, partly due to higher general and administrative costs and severance expenses.

US Market Performance

The core US business is slowing, impacting overall growth prospects.

Domino's Pizza (DPZ) vs. S&P 500 (SPY)

Market Cap

$17.04B

Dividend Yield1.26%

Average Volume (3M)640.56K

Price to Earnings (P/E)28.4

Beta (1Y)0.93

Revenue Growth4.28%

EPS Growth13.76%

CountryUS

Employees6,400

SectorConsumer Cyclical

Sector Strength75

IndustryRestaurants

Share Statistics

EPS (TTM)4.33

Shares Outstanding34,241,478

10 Day Avg. Volume491,882

30 Day Avg. Volume640,561

Financial Highlights & Ratios

PEG Ratio6.03

Price to Book (P/B)-7.49

Price to Sales (P/S)0.00

P/FCF Ratio28.62

Enterprise Value/Market Cap1.25

Enterprise Value/Revenue1.14

Enterprise Value/Gross Profit11.39

Enterprise Value/Ebitda5.53

Forecast

1Y Price Target

$507.12

Price Target Upside2.85% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering27

Domino's Pizza Business Overview & Revenue Model

Company DescriptionDomino'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 MoneyDomino'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 Key Performance Indicators (KPIs)

Any

Store Count by Type

Store Count by Type
Shows the number of stores categorized by type, such as company-owned or franchised, indicating the company’s expansion strategy and market penetration.

Chart InsightsDomino's Pizza has seen a steady increase in US franchise and international store counts, reflecting robust global expansion. However, US company-owned stores experienced a notable decline in late 2022, likely due to strategic realignment. The latest earnings call highlights challenges such as declining US same-store sales and delivery segment pressures, but international growth remains strong, driven by Asia and the Americas. The new DoorDash partnership and product launches are expected to bolster future growth, despite current operational hurdles.

Data provided by:

Main Street Data

Domino's Pizza Financial Statement Overview

Summary

Domino's Pizza exhibits strong revenue and margin metrics, with solid cash flow generation. However, the high leverage and negative stockholders' equity pose potential risks to financial stability, necessitating caution despite robust operational performance.

Income Statement

Very Positive

Domino's Pizza has demonstrated consistent revenue growth, with a TTM revenue increase of 5.3% compared to the previous year. The gross profit margin is strong at 39.5%, and net profit margin is healthy at 12.8%. The EBIT and EBITDA margins are also robust at 18.6% and 20.1%, respectively, indicating efficient operations and cost management. Overall, the income statement reflects a solid growth trajectory and profitability.

Balance Sheet

Neutral

The balance sheet shows a high debt-to-equity ratio due to negative stockholders' equity, indicating significant leverage, which poses a potential risk. However, the company maintains a good level of cash and short-term investments relative to its current liabilities, providing some liquidity buffer. Return on equity is not calculable due to negative equity. The equity ratio is negative due to liabilities exceeding assets, which is a concern for financial stability.

Cash Flow

Positive

Domino's Pizza has shown a strong operating cash flow of $680.5 million TTM, with a notable free cash flow growth rate of 11.9% compared to the previous period. The operating cash flow to net income ratio is 1.12, indicating efficient cash generation relative to reported earnings. The free cash flow to net income ratio is 0.94, suggesting a strong ability to convert earnings into cash. This reflects efficient capital management despite high financing outflows.

TTM	Dec 2024	Dec 2023	Mar 2023	Mar 2022	Mar 2021
Breakdown
Income Statement		Total Revenue
4.73B	4.71B	4.48B	4.54B	4.36B	4.12B
	Gross Profit
1.87B	1.85B	1.73B	1.65B	1.69B	1.59B
	EBIT
879.03M	879.00M	819.52M	767.92M	780.41M	725.64M
	EBITDA
950.32M	1.01B	929.55M	851.34M	890.43M	790.68M
	Net Income Common Stockholders
608.00M	584.17M	519.12M	452.26M	510.47M	491.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
501.73M	186.13M	114.10M	60.36M	148.16M	168.82M
	Total Assets
1.88B	1.74B	1.67B	1.60B	1.67B	1.57B
	Total Debt
5.21B	5.20B	5.21B	5.25B	5.29B	4.36B
	Net Debt
4.90B	5.01B	5.10B	5.19B	5.14B	4.19B
	Total Liabilities
5.79B	5.70B	5.75B	5.79B	5.88B	4.87B
	Stockholders Equity
-2.22B	-3.96B	-4.07B	-4.19B	-4.21B	-3.30B
Cash Flow		Free Cash Flow
573.06M	512.01M	485.47M	388.08M	560.03M	504.03M
	Operating Cash Flow
680.51M	624.90M	590.86M	475.32M	654.21M	592.79M
	Investing Cash Flow
-25.71M	-31.23M	-106.92M	-53.68M	-142.72M	-128.93M
	Financing Cash Flow
-549.32M	-532.22M	-476.36M	-515.95M	-522.83M	-446.41M

Domino's Pizza Technical Analysis

Technical Analysis Sentiment

Positive

Last Price493.07

Price Trends

50DMA

468.04

Positive

100DMA

457.97

Positive

200DMA

443.02

Positive

Market Momentum

MACD

6.02

Negative

RSI

60.34

Neutral

STOCH

88.98

Negative

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 493.07 is above the 20-day moving average (MA) of 485.64, above the 50-day MA of 468.04, and above the 200-day MA of 443.02, indicating a bullish trend. The MACD of 6.02 indicates Negative momentum. The RSI at 60.34 is Neutral, neither overbought nor oversold. The STOCH value of 88.98 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DPZ.

Domino's Pizza Risk Analysis

Domino's Pizza disclosed 26 risk factors in its most recent earnings report. Domino's Pizza reported the most risks in the “Production” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Domino's Pizza Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DPZ	77 Outperform	$17.04B	28.38	-14.74%	1.26%	4.28%	13.76%
WING	70 Outperform	$9.31B	55.98	-16.09%	0.31%	30.98%	112.65%
YUM	68 Neutral	$41.60B	29.84	-19.43%	1.82%	10.09%	-11.50%
WEN	66 Neutral	$2.37B	13.17	90.40%	8.10%	2.18%	-5.15%
EAT	63 Neutral	$6.63B	20.71	314.08%	―	19.80%	117.96%
PZZA	62 Neutral	$1.35B	17.48	-20.16%	4.46%	-2.77%	4.01%
Sector *	62 Neutral	$6.98B	11.38	2.86%	3.90%	2.64%	-22.07%

* Consumer Cyclical Sector Average

Performance Comparison

DPZ

Domino's Pizza

493.07

-11.78

-2.33%

EAT

Brinker International

150.08

85.55

132.57%

PZZA

Papa John's International

40.79

-6.12

-13.05%

WEN

Wendy's

12.25

-4.59

-27.26%

YUM

Yum! Brands

149.03

12.58

9.22%

WING

Wingstop

327.78

-49.39

-13.09%

Domino's Pizza Earnings Call Summary

Earnings Call Date:Apr 28, 2025

(Q1-2025)

% Change Since: 1.13%|

Next Earnings Date:Jul 17, 2025

Earnings Call Sentiment Neutral

The earnings call reflects both strategic advancements and operational challenges. While the launch of new products and partnerships indicate potential future growth, current pressures on same store sales and the delivery segment present significant hurdles. The company remains optimistic about its strategic initiatives and market share gains despite these challenges.

Q1-2025 Updates

Positive Updates

Successful Launch of Parmesan Stuffed Crust Pizza

Domino's introduced a new menu item, Parmesan Stuffed Crust pizza, which has received positive consumer feedback and is expected to drive market share growth. Although it didn't significantly impact Q1, the company anticipates long-term benefits.

Partnership with DoorDash

Domino's announced a partnership with DoorDash, the largest aggregator in the US, to expand its delivery reach, expecting a 50% incrementality from this collaboration.

International Sales Growth

International retail sales grew 8.2%, driven by strong performance in Asia, particularly in India, and in the Americas region, notably in Canada.

Record Share Repurchase

Domino's repurchased approximately 115,000 shares at an average price of $434, totaling $50 million, with $764 million remaining on its share repurchase authorization.

Negative Updates

Decline in Same Store Sales

US same store sales declined by 0.5%, impacted by negative traffic and a slight decline in mix due to a higher carryout business.

Challenges in Delivery Business

The delivery segment continues to be affected by macroeconomic pressures, impacting low-income consumers and resulting in a 1.5% decline in delivery comps.

Store Closures in Japan

Domino's Pizza Enterprises closed over 200 underperforming stores, primarily in Japan, affecting international net store growth negatively.

Higher G&A Expenses

General and administrative expenses increased, primarily due to severance costs related to organizational realignment.

Company Guidance

During Domino's Pizza's First Quarter 2025 Earnings Conference Call, the company provided guidance and metrics reflecting their strategic goals and market performance. Domino's reported a 1.4% increase in income from operations for Q1, excluding foreign currency impacts, driven by supply chain gross margin growth and higher international franchise royalties and fees, despite being partially offset by increased G&A costs. The company saw a 4.7% growth in global retail sales, excluding foreign currency effects, with US sales growing by 1.3% due to net store growth, surpassing the QSR pizza category which remained flat. Although US same-store sales declined by 0.5%, the company benefited from a 1.8% pricing increase. Internationally, retail sales grew 8.2%, with a 3.7% rise in same-store sales, primarily due to strong performances in Asia and the Americas. Domino's maintained its full-year outlook for a 3% US same-store sales growth and 1% to 2% international same-store sales growth, anticipating an 8% operating profit growth, excluding currency impacts and severance costs. They also highlighted the launch of Parmesan Stuffed Crust Pizza and a new partnership with DoorDash, expecting this to impact the second half of the year significantly.

Domino's Pizza Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Domino’s Pizza Promotes Joseph H. Jordan to COO

Positive

Mar 10, 2025

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.

Executive/Board ChangesShareholder Meetings

Domino’s Pizza Board Member Diana F. Cantor Retires

Neutral

Feb 20, 2025

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.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.