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Domino's Pizza Inc DPZ

Morningstar Rating
$396.49 +3.68 (0.94%)
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Company Report

Domino's Should Be Well Positioned for Challenging Restaurant Industry Backdrop in 2024

With an 80% digital sales mix, a strong loyalty program, and a quickly growing carryout business, Domino's looks well positioned to navigate a turbulent industry environment. While the reopening of dine-in options has weighed on recent results, the firm has taken 220 basis points of market share in the quick-service restaurant, or QSR, pizza category since 2019, seeing its share of global sales swell to 20.6% in 2022, according to Euromonitor data and our calculations. While we expect a challenging couple of quarters, with evidence of consumer trade-down and declining industrywide traffic, we view the firm's long-term emphasis on defending franchisee profits, supporting its growing carryout business, and building store density at the market level (fortressing) as prudent.

Price vs Fair Value

DPZ is trading at a 2% premium.
Price
$392.88
Fair Value
$648.00
Uncertainty
Medium
1-Star Price
$527.86
5-Star Price
$588.10
Economic Moat
Nvvj
Capital Allocation
Pmzkwynwy

Bulls Say, Bears Say

Bulls

Category-leading margins and compelling cash-on-cash returns should render Domino's 5%-7% global net unit growth targets attainable.

Bears

A return to dine-in traffic figures to pose a near-term headwind for Domino's, as a COVID-19 induced delivery mix-shift abates.

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Trading Information

Previous Close Price
$392.81
Day Range
$388.68396.68
52-Week Range
$286.10409.47
Bid/Ask
$396.28 / $396.65
Market Cap
$13.82 Bil
Volume/Avg
348,628 / 631,935

Key Statistics

Price/Earnings (Normalized)
28.27
Price/Sales
3.12
Dividend Yield
1.20%
Dividend Yield (Forward)
1.23%
Total Yield
2.74%

Company Profile

Domino’s is a restaurant operator and franchiser with nearly 20,000 global stores across more than 90 international markets at the end of 2022. The firm generates revenue through the sales of pizza, wings, salads, sandwiches, and desserts at company-owned stores, royalty and marketing contributions from franchise-operated stores, and its network of 26 domestic (and five Canadian) dough manufacturing and supply chain facilities, which centralize purchasing, preparation, and last-mile delivery for the firm's U.S. and Canadian restaurants. With roughly $17.7 billion in 2022 system sales, Domino’s is the largest player in the global pizza market, ahead of Pizza Hut, Little Caesars, and Papa John’s.
Sector
Consumer Cyclical
Industry
Restaurants
Stock Style Box
Mid Core
Total Number of Employees
11,000

Competitors

Valuation

Metric
DPZ
QSR
YUM
Price/Earnings (Normalized)
28.2722.3124.15
Price/Book Value
7.76
Price/Sales
3.124.745.09
Price/Cash Flow
23.8220.1622.24
Price/Earnings
DPZ
QSR
YUM

Financial Strength

Metric
DPZ
QSR
YUM
Quick Ratio
0.590.970.87
Current Ratio
1.411.151.13
Interest Coverage
4.183.264.44
Quick Ratio
DPZ
QSR
YUM

Profitability

Metric
DPZ
QSR
YUM
Return on Assets (Normalized)
33.21%6.43%25.62%
Return on Equity (Normalized)
55.75%
Return on Invested Capital (Normalized)
64.65%10.64%59.57%
Return on Assets
DPZ
QSR
YUM

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