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How Much Upside Is Left in Domino’s Stock Price?

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Stock performance

As of May 22, Domino’s Pizza (DPZ) was trading at $248.21, which represents growth of 6.3% since the announcement of its first-quarter earnings on April 26. The company had posted adjusted EPS of $2.0 on revenues of $785.4 million. Analysts were expecting the company to post EPS of $1.77 on revenues of $691.9 million. The company also outperformed analysts’ SSSG (same-store sales growth) expectation of 5.4% in the domestic market by posting 8.3%. Domino’s strong sales and earnings in the first quarter appear to have increased investors’ confidence, leading to a rise in its stock price.

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Year-to-date performance

In 2017, Domino’s stock price increased 18.7%. Continuing on the momentum, the company’s stock price has returned 31.4% since the beginning of this year. Peers Papa John’s (PZZA) and Yum! Brands (YUM) have returned -8.8% and 0.9%, year-to-date, respectively. Also, the broader comparative indices, the S&P 500 (SPX) and the Consumer Discretionary Select Sector SPDR ETF (XLY), have returned 2.3%, and 6.4%, respectively.

Series overview

In this series, we’ll look at analysts’ revenue and EPS expectations for the next four quarters. Also, we’ll cover management’s guidance for the next three to five years. Finally, we’ll end this series by looking at the company’s valuation multiple and analysts’ recommendations.

Let’s start by looking at analysts’ revenue expectations for Domino’s in the next part of this series.

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