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With a market cap of $16.3 billion, Ann Arbor, Michigan-based Domino's Pizza, Inc. (DPZ) is a leading player in the Quick-Service Restaurant (QSR) pizza category. Operating through its U.S. Stores, International Franchise, and Supply Chain segments, the company delivers a wide range of pizzas and complementary menu items under the Domino's brand globally.
Shares of the pizza delivery giant have underperformed the broader market over the past 52 weeks. DPZ has risen 22% over this time frame, while the broader S&P 500 Index ($SPX) has gained 31.8%. In 2024, shares of DPZ are up 14.6%, compared to SPX’s 25.8% increase on a YTD basis.
Narrowing the focus, DPZ has also lagged behind the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 30.6% rise over the past 52 weeks and 23.1% return on a YTD basis.
Despite reporting better-than-expected Q3 adjusted EPS of $4.19, shares of DPZ fell 1.1% on Oct. 10 because its Q3 revenue of $1.1 billion, while up 5.1% year-over-year, missed analyst expectations. The company lowered its 2024 global retail sales growth forecast to 6% from at least 7%, citing a "challenging macroeconomic environment," which raised investor concerns. Additionally, slower-than-anticipated growth in international store comps, which rose only marginally compared to 3.3% the previous year, contributed to market disappointment.
For the current fiscal year, ending in December, analysts expect DPZ’s EPS to grow 14.7% year-over-year to $16.82. The company’s earnings surprise history is promising. It beat the consensus estimates in the last four quarters.
Among the 29 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 17 “Strong Buy” ratings, two “Moderate Buys,” nine “Holds,” and one “Strong Sell.”
This configuration is slightly more bullish than three months ago, with 16 “Strong Buy” ratings on the stock.
On Nov. 26, TD Cowen raised its price target for Domino’s Pizza to $515 while maintaining a “Buy” rating, citing increased confidence in the company's 2025 growth prospects. The firm's optimism is driven by Domino’s "Hungry for More" strategic plan, which supports expectations for U.S. same-store sales in 2025 to exceed guidance.
As of writing, DPZ is trading below the mean price target of $484.73. The Street-high price target of $559 implies a potential upside of 18.3%.
