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 $436.13, Domino's Pizza Inc has witnessed a daily loss of 0.45%, marked against a three-month change of 4.51%. A thorough analysis, underlined by the GF Score, suggests that Domino's Pizza Inc is well-positioned for substantial growth in the near future.
Understanding 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.
- Financial strength rank: 4/10
- Profitability rank: 10/10
- Growth rank: 9/10
- GF Value rank: 6/10
- Momentum rank: 7/10
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. GuruFocus assigned Domino's Pizza Inc the GF Score of 92 out of 100, which signals the highest outperformance potential.
Understanding Domino's Pizza Inc Business
Domino's Pizza Inc is a restaurant operator and franchiser with nearly 20,600 global stores across more than 90 international markets at the end of 2023. 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 25 domestic (and five Canadian) dough manufacturing and supply chain facilities, which centralize purchasing, preparation, and last-mile delivery for the firm's US and Canadian restaurants. With roughly $18.3 billion in 2023 system sales, Domino's is the largest player in the global pizza market, ahead of Pizza Hut, Little Caesars, and narrow-moat Papa John's.
Profitability Rank Breakdown
The Profitability Rank shows Domino's Pizza Inc's impressive standing among its peers in generating profit. 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 4.0 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 6.8%, which outperforms worse than 70.3% of 330 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 9.5, and the rate over the past five years is 12.7. This trend accentuates the company's continued capability to drive growth.
Conclusion: Domino's Financial Strength and Growth Potential
Domino's Pizza Inc's financial strength, profitability, and growth metrics, as highlighted by the GF Score, underscore the firm's unparalleled position for potential outperformance. The company's strategic initiatives and consistent operational performance make it a compelling choice for investors seeking long-term growth. As the largest player in the global pizza market, Domino's continues to leverage its extensive network and innovative strategies to maintain its competitive edge. For those interested in exploring more companies with strong GF Scores, GuruFocus Premium members can utilize 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.
