DPZ - DPC Dash: Better Than Expected Revenues Improve Stock Prospects

2024-05-01 00:30:39 ET

Summary

• DPC Dash, China's largest Domino's Pizza franchise owner, has seen an expected price decline of 15% since last December due to its elevated market multiples.
• The company's financials look better, though. It reported a better than expected 51% revenue increase in 2023, and its adjusted EBITDA margin has improved too.
• The outlook for revenues continues to be sunny and if cost management continues, its margins can keep improving too. But its price hasn't fallen enough to justify a Buy.

Since I wrote about mainland China’s biggest Domino’s Pizza ( DPZ ) franchise owner, DPC Dash (HK:1405, [[DPCDF]]), in December last year, its price has declined by 15%. This was expected. The stock had run up significantly since its IPO earlier in 2023. This raised its market multiples to levels that weren’t justified, especially since it doesn’t have a history of profits....

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