Domino's Pizza (DPZ) AI Stock Analysis

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Domino's Pizza

(NASDAQ:DPZ)

Rating:66Neutral

Price Target:

$502.00

▲(11.31%Upside)

Domino's Pizza scores moderately due to a solid financial performance and strategic initiatives highlighted in the earnings call. However, technical analysis indicates bearish momentum, and high leverage on the balance sheet raises concerns. Valuation appears stretched, but corporate events could positively impact future operations.

Positive Factors

Market Share Gains

Domino's Pizza is supported by sustainability in market share gains and durability of franchisee profitability.

Partnerships and New Products

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.

Value Platform

The diversity of items included in the value platform at DPZ is an advantage compared to more limited offerings for low price meal deals.

Negative Factors

International Sales

Beat in Int’l SSS at 3.8%, but reiterated 1%-2% guide, meaning decel possible.

Unit Growth

Unit growth miss, largely due to timing of DMP’s 200 closures, company still expects net unit additions similar to 2024.

US Comps

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

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

Market Cap

$15.30B

Dividend Yield1.56%

Average Volume (3M)496.43K

Price to Earnings (P/E)25.6

Beta (1Y)0.92

Revenue Growth4.28%

EPS Growth13.76%

CountryUS

Employees6,400

SectorConsumer Cyclical

Sector Strength57

IndustryRestaurants

Share Statistics

EPS (TTM)4.33

Shares Outstanding34,241,478

10 Day Avg. Volume621,364

30 Day Avg. Volume496,426

Financial Highlights & Ratios

PEG Ratio-3.54

Price to Book (P/B)-2.95

Price to Sales (P/S)0.00

P/FCF Ratio31.89

Enterprise Value/Market Cap1.15

Enterprise Value/Revenue0.94

Enterprise Value/Gross Profit9.40

Enterprise Value/Ebitda4.56

Forecast

1Y Price Target

$503.77

Price Target Upside11.70% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering25

Domino's Pizza Business Overview & Revenue Model

Company DescriptionDomino's Pizza, Inc. (DPZ) is a leading global pizza delivery and carryout chain with a presence in numerous countries. Founded in 1960 and headquartered in Ann Arbor, Michigan, the company operates through a network of company-owned and franchised stores. Domino's offers a diverse menu that includes a variety of pizzas, pastas, sandwiches, chicken, and side items, along with beverages and desserts. Known for its innovative technology and efficient delivery service, Domino's has established itself as a key player in the quick-service restaurant sector.

How the Company Makes MoneyDomino's Pizza generates revenue primarily through the sale of food and beverages at its company-owned stores and the collection of royalties and fees from franchised locations. Franchisees pay an initial franchise fee, ongoing royalties based on a percentage of their sales, and contribute to a national advertising fund. In addition to traditional sales channels, Domino's leverages its digital platforms, including a robust online ordering system and mobile app, to drive sales and enhance customer convenience. Significant partnerships with beverage and ingredient suppliers also contribute to cost efficiencies and revenue growth. The company's focus on expanding its global footprint through the opening of new stores, both company-owned and franchised, further drives its revenue generation.

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 Earnings Call Summary

Earnings Call Date:Apr 28, 2025

(Q1-2025)

% Change Since: -7.50%|

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 Financial Statement Overview

Summary

Domino's Pizza shows strong revenue growth and profitability with healthy margins. However, the balance sheet indicates high leverage with negative stockholders' equity, which is concerning for long-term stability. Cash flow generation remains robust, reflecting effective operational management.

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

Negative

Last Price451.00

Price Trends

50DMA

473.22

Negative

100DMA

465.86

Negative

200DMA

446.24

Positive

Market Momentum

MACD

-6.59

Positive

RSI

35.54

Neutral

STOCH

12.37

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DPZ, the sentiment is Negative. The current price of 451 is below the 20-day moving average (MA) of 473.84, below the 50-day MA of 473.22, and above the 200-day MA of 446.24, indicating a neutral trend. The MACD of -6.59 indicates Positive momentum. The RSI at 35.54 is Neutral, neither overbought nor oversold. The STOCH value of 12.37 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EAT	73 Outperform	$7.49B	24.26	314.08%	―	19.80%	117.96%
WING	71 Outperform	$10.64B	63.99	-16.09%	0.28%	30.98%	112.65%
DPZ	66 Neutral	$15.30B	25.62	-14.74%	1.56%	4.28%	13.76%
WEN	66 Neutral	$2.19B	12.15	90.40%	4.88%	2.18%	-5.15%
YUM	66 Neutral	$39.86B	28.59	-19.43%	1.98%	10.09%	-11.50%
PZZA	65 Neutral	$1.70B	21.94	-20.16%	3.55%	-2.77%	4.01%
Sector *	63 Neutral	$6.94B	11.34	2.80%	4.26%	2.68%	-24.70%

* Consumer Cyclical Sector Average

Performance Comparison

DPZ

Domino's Pizza

451.00

-64.68

-12.54%

EAT

Brinker International

176.29

108.82

161.29%

PZZA

Papa John's International

50.63

5.93

13.27%

WEN

Wendy's

11.43

-4.32

-27.43%

YUM

Yum! Brands

143.97

9.81

7.31%

WING

Wingstop

358.45

-38.90

-9.79%

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.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.