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Domino's Pizza (DPZ) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 mins read

Domino's Pizza (DPZ) closed at $423.46 in the latest trading session, marking a +0.46% move from the prior day. This move outpaced the S&P 500's daily loss of 0.48%. Meanwhile, the Dow lost 0.48%, and the Nasdaq, a tech-heavy index, lost 0.29%.

Coming into today, shares of the pizza chain had gained 3.08% in the past month. In that same time, the Retail-Wholesale sector lost 4.35%, while the S&P 500 lost 4.3%.

DPZ will be looking to display strength as it nears its next earnings release, which is expected to be October 8, 2020. On that day, DPZ is projected to report earnings of $2.73 per share, which would represent year-over-year growth of 33.17%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $944.53 million, up 15.07% from the year-ago period.

DPZ's full-year Zacks Consensus Estimates are calling for earnings of $12.84 per share and revenue of $4.07 billion. These results would represent year-over-year changes of +34.17% and +12.43%, respectively.

It is also important to note the recent changes to analyst estimates for DPZ. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.63% higher. DPZ currently has a Zacks Rank of #2 (Buy).

Looking at its valuation, DPZ is holding a Forward P/E ratio of 32.84. For comparison, its industry has an average Forward P/E of 32.84, which means DPZ is trading at a no noticeable deviation to the group.

Also, we should mention that DPZ has a PEG ratio of 2.36. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Retail - Restaurants stocks are, on average, holding a PEG ratio of 4.58 based on yesterday's closing prices.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 60, which puts it in the top 24% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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