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

Zacks Equity Research

Domino's Pizza (DPZ) closed at $375.82 in the latest trading session, marking a -0.16% move from the prior day. This change lagged the S&P 500's daily gain of 1.2%. Meanwhile, the Dow gained 1.7%, and the Nasdaq, a tech-heavy index, added 1.13%.

Investors will be hoping for strength from DPZ as it approaches its next earnings release. On that day, DPZ is projected to report earnings of $2.17 per share, which would represent a year-over-year decline of 0.91%. Meanwhile, our latest consensus estimate is calling for revenue of $876.24 million, up 7.96% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $11.20 per share and revenue of $3.92 billion, which would represent changes of +17.03% and +8.32%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for DPZ. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.43% higher. DPZ currently has a Zacks Rank of #2 (Buy).

Digging into valuation, DPZ currently has a Forward P/E ratio of 33.62. For comparison, its industry has an average Forward P/E of 46.14, which means DPZ is trading at a discount to the group.

Meanwhile, DPZ's PEG ratio is currently 2.63. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Restaurants was holding an average PEG ratio of 4.86 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 76, which puts it in the top 30% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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