Domino's Pizza, Inc. Fundamental Analysis (NASDAQ: DPZ)
Domino's Pizza, Inc. (NASDAQ: DPZ) shows moderate financial fundamentals with a PE ratio of 20.62, profit margin of 11.86%, and ROE of -15.15%. The company generates $5.0B in annual revenue with moderate year-over-year growth of 4.96%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 54.3/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze DPZ's fundamental strength across five key dimensions:
Efficiency Score
ExcellentDPZ demonstrates superior asset utilization.
Valuation Score
ModerateDPZ shows balanced valuation metrics.
Growth Score
WeakDPZ faces weak or negative growth trends.
Financial Health Score
ExcellentDPZ maintains a strong and stable balance sheet.
Profitability Score
WeakDPZ struggles to sustain strong margins.
Key Financial Metrics
Is DPZ Expensive or Cheap?
P/E Ratio
DPZ trades at 20.62 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, DPZ's PEG of 9.66 indicates potential overvaluation.
Price to Book
The market values Domino's Pizza, Inc. at -3.05 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 7.18 times EBITDA. This is generally considered low.
How Well Does DPZ Make Money?
Net Profit Margin
For every $100 in sales, Domino's Pizza, Inc. keeps $11.86 as profit after all expenses.
Operating Margin
Core operations generate 19.54 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-15.15 in profit for every $100 of shareholder equity.
ROA
Domino's Pizza, Inc. generates $33.83 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Domino's Pizza, Inc. produces operating cash flow of $772.29M, showing steady but balanced cash generation.
Free Cash Flow
Domino's Pizza, Inc. generates strong free cash flow of $648.84M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $19.61 in free cash annually.
FCF Yield
DPZ converts 5.39% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
20.62
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
9.66
vs 25 benchmark
P/B Ratio
Price to book value ratio
-3.05
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.40
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-1.29
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.54
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.15
vs 25 benchmark
ROA
Return on assets percentage
0.34
vs 25 benchmark
ROCE
Return on capital employed
0.84
vs 25 benchmark
How DPZ Stacks Against Its Sector Peers
| Metric | DPZ Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 20.62 | 27.56 | Better (Cheaper) |
| ROE | -15.15% | 931.00% | Weak |
| Net Margin | 11.86% | -2999.00% (disorted) | Strong |
| Debt/Equity | -1.29 | 0.61 | Strong (Low Leverage) |
| Current Ratio | 1.54 | 2.24 | Neutral |
| ROA | 33.83% | 327.00% | Weak |
DPZ outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Domino's Pizza, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
37.50%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
40.36%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
53.13%
Industry Style: Cyclical, Growth, Discretionary
High Growth