AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |
Back to Blog
Dominos stock valuation12/28/2023 ![]() Ultimately, this is a business that I respect and a leadership team that I wish could be cloned. No doubt Domino's has the best-known brand among the battlers in my postcode, the best technology, competitive prices and among the fastest delivery times, but that's an awfully competitive market for a single postcode. To the latter point, Menulog says that 17 Italian restaurants will deliver to my postcode. Domino's has done a masterful job of keeping them coming back for more but tastes change and competition among pizza slingers is fierce. Competition pressuresĪlso, consumers are fickle. Investors who have lost sight of that more tame base rate, and who haven't noticed that net spending on acquisitions over the past three years was double that spent on capital expenditures, might be disappointed when growth normalises to historical organic trends. ![]() The average like-for-like sales growth over the past decade has been 6.2 per cent. Market is paying higher multiples for shares of almost every stripe today than he did five years ago and Domino's outstanding performance merits a higher valuation than in days' past.Ī trading multiple of 65 times earnings represents a significant amount of optimism, though, especially when you consider that the company has exceeded 2016's Herculean group same-store-sales growth of 10.9 per cent only once in at least the past 10 years. The shares have vaulted from selling for about 27 times underlying diluted earnings a share five years ago to 65 times today. Impressive fundamentals have been the driving force behind the shares' run, however, a massive re-rating has also played a major role. That makes for three years in a row that Domino's has beaten analysts' expectations, according to Bloomberg, which explains a lot about the shares' epic run. Outstanding store-level results coupled with 484 new stores made for a big year in terms of Domino's bottom line, with underlying earnings per share up 41.9 per cent. If you compound out the same-store-sales growth from the past three years it looks like a typical Domino's in the region has grown its sales by a cumulative 35.8 per cent. The Australia and New Zealand segment stands out from an impressive group, with same-store-sales increasing a staggering 14.8 per cent in 2016. Group network same-store-sales accelerated from a strong 5.8 per cent in 2014 to a very strong 8.6 per cent in 2015, only to be blown away by a 10.9 per cent surge in 2016. For starters, chief executive Don Meij, who should rate as a first-ballot Hall of Famer if one ever opens for listed company chiefs, and his colleagues are eating their rivals' lunch, dinner, and reheated breakfast. ![]() CNBC's Michael Bloom contributed to this report.Both, in my opinion. Goldman's price target for Domino's is $450 per share, representing upside of less than 7% for the stock. suggests that the brand is potentially ceding share to Pizza Hut, while potentially gaining share from Papa Johns over the last roughly six months," the note said. ![]() There are also competition concerns from other national chains. ![]() "However, DPZ shares are up 27% since bottoming in early March, and +10% YTD vs our Fast Food coverage +11% (+8% ex JACK), and we see risk/reward more fairly balanced at current valuation levels, especially with challenging SSS laps ahead." Goldman said Domino's will likely see same-store-sales decline year over year in the months ahead now that in-person dining has reopened across the country, which could hold the stock back. "We continue to believe in the long-term story for DPZ and see the company's strong technology ecosystem and industry leading franchise unit economics as supportive of the long-term algorithm for 6-8% unit growth and 8-10% systemwide sales growth," Garber said in a note. Analyst Jared Garber downgraded the stock to neutral from buy, citing valuation concerns. Shares of the pizza chain have been one of the best bets for investors over the past decade, but the stock's rise in the last two months has been a bit too rapid, Goldman said Tuesday. Personal Loans for 670 Credit Score or Lowerĭomino's Pizza needs to cool off before investors make it a key part of their portfolio again, according to Goldman Sachs. Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit ![]()
0 Comments
Read More
Leave a Reply. |