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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 $383.46 in the latest trading session, marking a -0.3% move from the prior day. This change lagged the S&P 500's daily gain of 0.64%. Elsewhere, the Dow gained 0.65%, while the tech-heavy Nasdaq added 0.14%.

Coming into today, shares of the pizza chain had lost 0.83% in the past month. In that same time, the Retail-Wholesale sector gained 1.3%, while the S&P 500 gained 3.19%.

Investors will be hoping for strength from DPZ as it approaches its next earnings release. The company is expected to report EPS of $3.77, up 20.45% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.38 billion, up 19.82% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $12.42 per share and revenue of $4.14 billion. These totals would mark changes of +29.78% and +14.33%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for DPZ. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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 0.07% lower. DPZ currently has a Zacks Rank of #3 (Hold).

In terms of valuation, DPZ is currently trading at a Forward P/E ratio of 30.98. This valuation marks a discount compared to its industry's average Forward P/E of 34.7.

Investors should also note that DPZ has a PEG ratio of 2.22 right now. 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. DPZ's industry had an average PEG ratio of 3.04 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 167, which puts it in the bottom 35% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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