Domino's Pizza, Inc. Fundamental Analysis (NASDAQ: DPZ)
Domino's Pizza, Inc. (NASDAQ: DPZ) shows moderate financial fundamentals with a PE ratio of 16.91, profit margin of 12.03%, and ROE of -15.48%. 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 48.9/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
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
ModerateDPZ shows balanced financial health with some risks.
Profitability Score
WeakDPZ struggles to sustain strong margins.
Key Financial Metrics
Is DPZ Expensive or Cheap?
P/E Ratio
DPZ trades at 16.91 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, DPZ's PEG of 2.97 indicates potential overvaluation.
Price to Book
The market values Domino's Pizza, Inc. at -2.57 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 5.11 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 $12.03 as profit after all expenses.
Operating Margin
Core operations generate 19.75 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-15.48 in profit for every $100 of shareholder equity.
ROA
Domino's Pizza, Inc. generates $34.50 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 $757.27M, showing steady but balanced cash generation.
Free Cash Flow
Domino's Pizza, Inc. generates strong free cash flow of $633.06M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $19.24 in free cash annually.
FCF Yield
DPZ converts 6.24% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
16.91
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
2.97
vs 25 benchmark
P/B Ratio
Price to book value ratio
-2.57
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.00
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-1.29
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.49
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
-8.85
vs 25 benchmark
How DPZ Stacks Against Its Sector Peers
| Metric | DPZ Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 16.91 | 24.62 | Better (Cheaper) |
| ROE | -15.48% | 963.00% | Weak |
| Net Margin | 12.03% | -2411.00% (disorted) | Strong |
| Debt/Equity | -1.29 | 0.61 | Strong (Low Leverage) |
| Current Ratio | 0.49 | 2.33 | Weak Liquidity |
| ROA | 34.50% | 374.00% | 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