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This fast food company is crushing the competition

Talking Numbers

This fast food company is crushing the competition

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This fast food company is crushing the competition

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No matter how you slice it, Domino’s Pizza delivered some delicious earnings results topping Wall Street’s expectations.

Shares of America’s second-largest pizza company were up 3 percent on Tuesday after Domino’s earnings and sales beat analysts’ estimates.

Domino’s also may have eaten a little bit of its largest rival’s lunch in the previous three months. Same-store sales for Domino’s in the U.S. were up by 5.4 percent and 7.7 percent abroad. Meanwhile, Yum Brands’ Pizza Hut saw a drop 2 percent in same-store sales.

Beating its competition is nothing new for Domino’s, at least as far as its stock goes. In the past five years, its shares are up an astounding 800 percent, while rivals McDonald’s, Chipotle, and Yum Brands are up a respective 64, 641 and 122 percent. But is it too late to buy?

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Richard Ross, global technical strategist at Auerbach Grayson, likes the stock and would buy it on Tuesday’s breakout. 

Ross likes Domino’s because its technically significant 200-day moving average held on three tests in the past three months. “That forms a very nice bullish base of support on that 200-day,” he said. With Tuesday’s breakout above $75, Ross sees the stock headed higher.

“That sets us up for a retest of that old high around $80,” said Ross, a “Talking Numbers” contributor. “I think there’s upside from there.”

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However, a five-year chart gives Ross a reason to have some caution despite being bullish for now.

“We’re up 2,500 percent from the 2008 lows,” Ross said. “We’ve been above the 50-week moving average now for five years, with the exception of a little run-in there in 2012.”

Ross is keeping an eye on the $71 level. “A break below $71, you’re out of this trade, and I would not be a buyer there,” he said. “But absent that breakdown, I think there’s still room to run here in Domino’s.”

Steve Cortes, founder of Veracruz TJM, is also positive on Domino’s Pizza’s stock.

“Domino’s delivers, not just to its customers, it’s been delivering to shareholders for a heck of a long time and should continue to,” said Cortes. ”I don’t love the fundamental backdrop for restaurants in general, particularly with crude [oil] prices hovering where they are.”

With Domino’s same-store sales well outpacing the national average of 0.3 percent for restaurants, Cortes is enthusiastic about the company. ”This is an outlier, not just among pizza restaurants, but among restaurants in general,” Cortes said. “It is a leader, and I think you want to stick with this name.”

To see the full discussion on Domino’s Pizza, with Ross on the technicals and Cortes on the fundamentals, watch the above video from CNBC’s “Street Signs.”

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