Domino's Pizza offers pizzas under the Dominos Pizza brand name through company-owned and franchised Dominos Pizza stores. The company was founded in 1960 and is based in Ann Arbor, Michigan.
DPZ Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Dominos Pizza Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Dominos Pizza Inc ranked in the 30th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. The most interesting components of our discounted cash flow analysis for Dominos Pizza Inc ended up being:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 79. Notably, its equity weight is greater than 74.29% of US equities in the Consumer Cyclical sector yielding a positive free cash flow.
Dominos Pizza Inc's weighted average cost of capital (WACC) is 7%; for context, that number is higher than just 21.66% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Dominos Pizza Inc? See AAP, SERV, XELB, ELA, and PSO.
The restaurant sector has been one of the hardest hit during the pandemic, suffering from mass store closures all over the globe. But while COVID-19 essentially shut down the dine-in segment of restaurants, demand shifted toward deliveries and drive-thru purchases. As a result, franchised stores such as those of Domino's...
Nikolaos Sismanis on Seeking Alpha | September 23, 2020
I opened a position in CVS Health (CVS) today. In 10 years, I anticipate CVS being one of the top performers of the last decade. In 2012, I had the same level of conviction for Domino's Pizza (DPZ). People laughed. But look at what happened: That's from an article I...
Rocco Pendola on Seeking Alpha | September 23, 2020
The industry is notoriously difficult for business owners, with about 60% of new restaurants failing within their first year. One reason for this is that restaurant spending tends to be heavily discretionary, fluctuating dramatically with the broader economy. Restaurants as a group have not fared well during the COVID-19 pandemic. Many restaurants remain closed to service while millions of consumers confined at home are reluctant to dine out at the ones that are open.