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

Zacks Equity Research
·3 min read

Domino's Pizza (DPZ) closed at $383.19 in the latest trading session, marking a -0.44% move from the prior day. This move lagged the S&P 500's daily gain of 1.49%. Meanwhile, the Dow gained 0.69%, and the Nasdaq, a tech-heavy index, added 2.56%.

Coming into today, shares of the pizza chain had lost 0.03% in the past month. In that same time, the Retail-Wholesale sector lost 2.15%, while the S&P 500 gained 1.44%.

Wall Street will be looking for positivity from DPZ as it approaches its next earnings report date. The company is expected to report EPS of $3.77, up 20.45% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.38 billion, up 19.82% from the prior-year quarter.

Any recent changes to analyst estimates for DPZ should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. 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. 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.

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. The Zacks Consensus EPS estimate has moved 0.13% higher within the past month. DPZ currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that DPZ has a Forward P/E ratio of 29.96 right now. This valuation marks a discount compared to its industry's average Forward P/E of 30.43.

We can also see that DPZ currently has a PEG ratio of 2.15. 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 industry currently had an average PEG ratio of 2.7 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 171, putting it in the bottom 33% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

To follow DPZ in the coming trading sessions, be sure to utilize Zacks.com.


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Zacks Investment Research