US$471 - That's What Analysts Think Domino's Pizza, Inc. (NYSE:DPZ) Is Worth After These Results
Investors in Domino's Pizza, Inc. (NYSE:DPZ) had a good week, as its shares rose 6.1% to close at US$446 following the release of its full-year results. Domino's Pizza reported in line with analyst predictions, delivering revenues of US$4.5b and statutory earnings per share of US$14.66, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Domino's Pizza
Following the latest results, Domino's Pizza's 26 analysts are now forecasting revenues of US$4.81b in 2024. This would be an okay 7.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 6.3% to US$15.84. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.81b and earnings per share (EPS) of US$15.69 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The consensus price target rose 8.1% to US$471despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Domino's Pizza's earnings by assigning a price premium. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Domino's Pizza at US$550 per share, while the most bearish prices it at US$387. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Domino's Pizza shareholders.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of Domino's Pizza'shistorical trends, as the 7.3% annualised revenue growth to the end of 2024 is roughly in line with the 6.2% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.5% per year. So it's pretty clear that Domino's Pizza is expected to grow slower than similar companies in the same industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Domino's Pizza's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Domino's Pizza going out to 2026, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 2 warning signs for Domino's Pizza that you need to be mindful of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
