Domino's Pizza Inc (DPZ, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $356.41, Domino's Pizza Inc has witnessed a daily gain of 1.79%, marked against a three-month change of 2.16%. A thorough analysis, underlined by the GF Score, suggests that Domino's Pizza Inc is well-positioned for substantial growth in the near future.
Decoding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Here is how Domino's Pizza Inc ranks in each of these components:
- Financial strength rank: 4/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 7/10
- Momentum rank: 10/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in profitability, growth, and momentum, and a decent rank in GF value, GuruFocus assigned Domino's Pizza Inc the GF Score of 95 out of 100, which signals the highest outperformance potential.
Inside Domino's Pizza Inc's Business
Domino's Pizza Inc, with a market cap of $12.51 billion and sales of $4.51 billion, is a restaurant operator and franchiser with nearly 20,000 global stores across more than 90 international markets at the end of 2022. The firm generates revenue through the sales of pizza, wings, salads, sandwiches, and desserts at company-owned stores, royalty and marketing contributions from franchise-operated stores, and its network of 26 domestic (and five Canadian) dough manufacturing and supply chain facilities. With roughly $17.7 billion in 2022 system sales, Domino's is the largest player in the global pizza market, ahead of Pizza Hut, Little Caesars, and Papa John's.
Profitability Rank Breakdown
The Profitability Rank shows Domino's Pizza Inc's impressive standing among its peers in generating profit. Domino's Pizza Inc Operating Margin has increased (1.63%) over the past five years, as shown by the following data: 2018: 16.65; 2019: 17.39; 2020: 17.62; 2021: 17.91; 2022: 16.93; . The Piotroski F-Score confirms Domino's Pizza Inc's solid financial situation based on Joseph Piotroski's nine-point scale, which measures a company's profitability, funding and operating efficiency. Domino's Pizza Inc's strong Predictability Rank of 5.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Domino's Pizza Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 13.3%, which outperforms better than 87.16% of 327 companies in the Restaurants industry. Moreover, Domino's Pizza Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 12.6, and the rate over the past five years is 15.6. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given Domino's Pizza Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. This makes it a compelling choice for investors seeking to capitalize on its robust growth prospects and market leadership. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
