Domino’s Slips as Piper Sandler Suggests Upside is ‘Baked In’
December 13, 2023
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Known for its convenient delivery options and delicious pizzas, the company has grown into one of the most successful pizza chains in the world. Recently, however, Domino’s stock has slipped as Piper Sandler suggested that the upside for the company may already be ‘baked in’. The company’s stock has been on a high since the beginning of the year, with investors seeing it as a safe bet during the volatile market due to its strong financials and consistent performance. Despite this, Piper Sandler analysts believe that Domino’s stock has already reached its peak and may not be able to sustain its current level. This caused the stock to slip as traders and investors took profits.
Despite this, Domino’s still remains a strong player in the pizza industry. The company also has a loyal customer base, which gives it a competitive edge. With Domino’s Pizza ($NYSE:DPZ) continuing to strive for delivering high-quality products and services, it is likely that it will remain profitable in the long run.
Market Price
On Monday, DOMINO’S PIZZA stock opened at $393.0 and closed at $397.5, up by 0.7% from previous closing price of 394.9. This followed a suggestion from Piper Sandler, which argued that current market prices of DOMINO’S PIZZA stock do not fully reflect the company’s potential upside. Analysts at Piper Sandler suggested that the upside potential of DOMINO’S PIZZA is already “baked in” to current market prices. They also indicated that the company should benefit from its robust product pipeline and its strong financial position. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Domino’s Pizza. More…
| Total Revenues | Net Income | Net Margin |
| 4.47k | 520.13 | 11.6% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Domino’s Pizza. More…
| Operations | Investing | Financing |
| 567.29 | -55 | -548.88 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Domino’s Pizza. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 1.62k | 5.76k | -118.74 |
Key Ratios Snapshot
Some of the financial key ratios for Domino’s Pizza are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 4.5% | 5.8% | 18.7% |
| FCF Margin | ROE | ROA |
| 10.5% | -12.5% | 32.2% |
Analysis
As GoodWhale, we have been tasked with analyzing DOMINO’S PIZZA‘s fundamentals. According to our Star Chart, DOMINO’S PIZZA is a strong company when it comes to dividend, profitability, and medium in terms of growth. However, it is weak in terms of assets. Because of this, we classify DOMINO’S PIZZA as a ‘cow’, indicating that it has the track record of paying out consistent and sustainable dividends. These factors make DOMINO’S PIZZA an attractive investment for income-seeking investors. The company also boasts a high health score of 8/10 with regard to its cashflows and debt, making it capable to safely ride out any crisis without the risk of bankruptcy. This makes it an appealing investment for those looking for long-term stability. More…
Peers
This paper will examine the competition between these four companies and the strategies they use to gain market share.
– Chipotle Mexican Grill Inc ($NYSE:CMG)
Chipotle Mexican Grill, Inc., together with its subsidiaries, operates Chipotle Mexican Grill restaurants. As of December 31, 2020, the company had 2,727 restaurants, including 2,658 Chipotle restaurants in the United States; 37 Chipotle restaurants in Canada; 24 Chipotle restaurants in the United Kingdom; and 8 Chipotle restaurants in France. It also operated 9 Pizzeria Locale restaurants. The company was founded in 1993 and is headquartered in Newport Beach, California.
– Yum Brands Inc ($NYSE:YUM)
Yum Brands Inc is a fast food company that owns Taco Bell, KFC, and Pizza Hut. Its market cap as of 2022 is 31.2 billion dollars and its ROE is -15.87%. The company has been struggling lately with same store sales declines and has been trying to turn things around by investing in digital ordering and delivery.
– Papa John’s International Inc ($NASDAQ:PZZA)
Papa John’s International Inc is a pizza chain with over 3,500 locations in over 45 US states and 35 countries. The company was founded in 1984 and is headquartered in Louisville, Kentucky. The company went public in 1993 and trades on the NASDAQ under the ticker symbol PZZA. Papa John’s has a market cap of $2.48 billion and a return on equity of -34.83%. The company has been struggling in recent years, with sales and profits declining. In 2020, the company announced it would be selling a minority stake to a private equity firm.
Summary
Analyst firm Piper Sandler recently released a research report on Domino’s Pizza, the worldwide pizza delivery company. The report concludes that the stock price of Domino’s has already factored in the potential upside, suggesting that no further upside is expected. Investors were disappointed by this news, and the stock subsequently slipped. Fundamental analysis of the company reveals a strong financial performance over the past few years, with revenue and profits increasing steadily.
Balancing this out, however, is the company’s high debt levels and high price-to-earnings ratio which could represent a risk for investors. Although the stock appears to be attractive from a fundamental point of view, it may currently be overvalued.
