Ann Arbor, Michigan-based Domino's Pizza, Inc. (DPZ) is a fast-food chain and one of the largest pizza companies in the world. Valued at a market cap of $10.5 billion, the company's menu also includes a variety of baked goods such as chicken wings, sandwiches, pasta, and desserts.
This pizza company has considerably underperformed the broader market over the past 52 weeks. Shares of DPZ have declined 34.4% over this time frame, while the broader S&P 500 Index ($SPX) has gained 27.4%. Moreover, on a YTD basis, the stock is down 24.1%, compared to SPX’s 8.8% rise.
Narrowing the focus, DPZ has also notably lagged the State Street Consumer Discretionary Select Sector SPDR ETF (XLY), which surged 12.1% over the past 52 weeks and declined marginally on a YTD basis.
On Apr. 27, shares of DPZ plunged 8.8% after posting weaker-than-expected Q1 results. The company’s revenue advanced 3.5% year-over-year to $1.15 billion but missed analyst expectations by 1.7%. Moreover, its EPS of $4.13 fell short of consensus estimates by 3.7%. Management attributed the soft quarterly performance to heightened competitive pressures and ongoing consumer uncertainty, which weighed on demand during the quarter.
For the current fiscal year, ending in December, analysts expect DPZ’s EPS to grow 9% year over year to $19.15. The company’s earnings surprise history is disappointing. It missed the consensus estimates in three of the last four quarters, while surpassing on another occasion.
Among the 30 analysts covering the stock, the consensus rating is a "Moderate Buy," which is based on 16 “Strong Buy,” 12 “Hold,” and two "Strong Sell” ratings.
The configuration is slightly more bullish than three months ago, with 15 analysts suggesting a “Strong Buy” rating.
On May 14, Wolfe Research analyst maintained a “Buy” rating on DPZ and set a price target of $390, indicating a 23.2% potential upside from the current levels.
The mean price target of $407.59 suggests a 28.8% premium to its current price levels, while its Street-high price target of $544 implies a 71.9% potential upside.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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