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Domino's Pizza Inc (DPZ)
NASDAQ:DPZ
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Domino's Pizza
(NASDAQ:DPZ)71Outperform
Positive Factors
International Performance
International same-store sales exceeded expectations and showed significant improvement from previous quarters.
Market Share Gains
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.
Negative Factors
U.S. Sales Performance
U.S. comps fell short of consensus and were pressured by macroeconomic challenges affecting low-income consumers.
Domino's Pizza (DPZ) vs. S&P 500 (SPY)
Market Cap
$16.52B
Dividend Yield1.25%
Average Volume (3M)646.14K
Price to Earnings (P/E)28.9
Beta (1Y)1.13
Revenue Growth5.07%
EPS Growth13.74%
CountryUS
Employees11,200
SectorConsumer Cyclical
Sector Strength53
IndustryRestaurants & Bars
Share Statistics
EPS (TTM)16.69
Shares Outstanding34,296,710
10 Day Avg. Volume830,759
30 Day Avg. Volume646,144
Financial Highlights & Ratios
PEG Ratio2.10
Price to Book (P/B)N/A
Price to Sales (P/S)3.51
Price to Cash Flow (P/CF)23.20
P/FCF Ratio18.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$488.00Price Target Upside2.48% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering25
Domino's Pizza Business Overview & Revenue Model
Company DescriptionDomino's Pizza, Inc. is a pizza company, which operates a network of company-owned and franchise-owned stores in the U.S. and international markets. It operates though the following three segments: U.S. Stores, International Franchise and Supply Chain. The U.S. Stores segment consists primarily of franchise operations. The International Franchise segment comprises of a network of franchised stores. The Supply Chain segment operates regional dough manufacturing and food supply chain centers. The company was founded by James Monaghan and Thomas Stephen Monaghan in 1960 and is headquartered in Ann Arbor, MI.
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 Financial Statement Overview
Summary
Domino's Pizza exhibits strong revenue growth and profitability, supported by efficient operations and consistent cash flow generation. However, the company faces significant financial risks due to high leverage and negative equity, which could impact its long-term financial health. The overall financial performance is positive, but the balance sheet's weaknesses should be addressed to ensure sustainable growth.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.78
Positive
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.45
Neutral
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.72
Positive
| 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
Positive
476.18
Price Trends
447.48
Positive
443.39
Positive
449.55
Positive
Market Momentum
8.82
Positive
55.78
Neutral
71.30
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 476.18 is above the 20-day moving average (MA) of 473.74, above the 50-day MA of 447.48, and above the 200-day MA of 449.55, indicating a bullish trend. The MACD of 8.82 indicates Positive momentum. The RSI at 55.78 is Neutral, neither overbought nor oversold. The STOCH value of 71.30 is Neutral, 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 (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $218.46B | 26.84 | -216.57% | 2.22% | 1.67% | -1.61% | |
75 Outperform | $44.21B | 30.38 | -19.43% | 1.72% | 6.68% | -7.09% | |
71 Outperform | $16.52B | 28.86 | -14.74% | 1.25% | 5.07% | 13.74% | |
67 Neutral | $1.52B | 18.37 | -20.16% | 3.94% | -3.57% | 2.31% | |
61 Neutral | $6.58B | 62.03 | -16.09% | 0.43% | 36.03% | 57.51% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% |
* Consumer Cyclical Sector Average
Performance Comparison
DPZ
Domino's Pizza
476.18
34.80
7.88%
MCD
McDonald's
307.45
21.47
7.51%
PZZA
Papa John's International
44.79
-23.57
-34.48%
YUM
Yum! Brands
159.37
22.51
16.45%
QSR
Restaurant Brands International
66.64
-11.98
-15.24%
WING
Wingstop
230.60
-137.80
-37.40%
Domino's Pizza Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: 2.99% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
Domino's continues to show strong market share growth and operational improvements, despite facing challenges in international store closures and softness in the US delivery segment. While operational and strategic initiatives are being effectively implemented, the impact of DPE's closures and macroeconomic pressures present notable challenges. However, the positives appear to outweigh the negatives, given the company's market share gains, new product success, and international growth.Highlights
Market Share Gains
Domino's gained about 1% market share in the US QSR Pizza segment, consistent with its average annual share growth since 2015, indicating successful execution of its Hungry for More strategy.
Retail Sales Growth
US retail sales grew by 5.3% in 2024, with significant same-store sales growth in carryout business, up over 6% for the year.
New Product Launches
Successful launch of New York Style Pizza and mac and cheese pasta as part of the company's innovation with intent approach.
Operational Improvements
Average delivery times decreased by two minutes over the last two years, and 1,600 DJ dough stretching machines rolled out, more than a 50% increase from Q3 2024.
International Growth
Domino's international business showed improvement, delivering 31 straight years of same-store sales growth.
Franchisee Growth
Added almost 60 new franchisees in 2024 with a pipeline of 120 future franchisees.
Profitable Growth
Despite a challenging environment, income from operations increased by 6.5% in Q4 2024, excluding foreign currency impacts.
Lowlights
Impact of DPE Closures
Domino's Pizza Enterprises (DPE) plans to close over 200 underperforming stores, primarily in Japan, affecting international growth expectations for 2025.
US Store Openings Below Target
US net store openings were negatively impacted by hurricane activity, leading to a lower than expected number of new store openings in 2024.
Softness in US Delivery Segment
Delivery comps were down 1.4% in Q4 2024, impacted by macroeconomic pressures and competitive environments.
Foreign Currency Headwinds
Expected to be a headwind of approximately 1% to 2% on operating income growth in 2025.
Company Guidance
During the Domino's Pizza Fourth Quarter 2024 Earnings Conference Call, the company provided guidance for 2025, focusing on its "Hungry for More" strategy. Domino's aims to achieve 3% or more US same-store sales growth annually, alongside opening 175 net new stores. The company reported a 5.3% increase in US retail sales for 2024, with a significant 6% growth in same-store sales for its carryout business. Domino's also saw a market share gain of about 1% in the US QSR pizza segment. The international business marked 31 consecutive years of same-store sales growth, with a 2.7% increase in Q4 2024. Domino's plans to expand its aggregator presence, projecting this channel could eventually contribute $1 billion in incremental sales, and highlighted operational improvements, such as a reduction in delivery times by two minutes over the past two years. The company expects global retail sales growth in 2025 to be similar to 2024's 6%, with operating profit growth targeted at 8%, despite potential macroeconomic challenges.Domino's Pizza Corporate Events
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.
Delistings and Listing ChangesBusiness Operations and Strategy
Domino’s Pizza Shifts Listing to Nasdaq in 2025
Neutral
Dec 12, 2024
Domino’s Pizza announced its decision to transfer its stock exchange listing from the New York Stock Exchange to the Nasdaq Global Select Market, effective December 31, 2024. This strategic move, with trading commencing on January 2, 2025, is set to maintain the company’s current ticker symbol ‘DPZ’, potentially affecting its market positioning and shareholder engagement.
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.