DPZ - Domino's Has Performed Very Well But We Still Think It Is Too Expensive
2024-05-20 09:14:20 ET
Summary
- Domino's Pizza reported strong quarterly earnings with global retail sales growth of 7.3% and income from operations and net income increasing by double digits.
- The company achieved strong organic growth in both U.S. and international stores, driven by positive order counts and the new Domino's Rewards loyalty program.
- Despite the strong performance, the company's valuation remains high compared to industry peers, leading to a maintained neutral view.
Domino's Pizza, Inc. ( DPZ ), through its subsidiaries, operates as a pizza company in the United States and internationally. We first evaluated DPZ’s business back in May 2022, when we assigned it a “hold” rating, which we later, in September 2023, reiterated . Both of these times, we have praised the firm’s strong commitment to returning value to its shareholders through dividend payments and share buybacks programs. The macroeconomic environment has also been discussed, primarily focusing on the diminishing impact of Covid-19 as well as on the levels of consumer confidence. Eventually, it was always the apparent overvaluation that held us back from pulling the trigger and starting a new position in DPZ....
Domino's Has Performed Very Well, But We Still Think It Is Too Expensive