Latest news with #DPZ
Yahoo
15-05-2025
- Business
- Yahoo
1 Restaurant Stock with Exciting Potential and 2 to Avoid
From fast food to fine dining, restaurants play a vital societal role. But the side dish is that they're quite difficult to operate because high inventory and labor costs generally lead to thin margins at the store level. This leaves little room for error if demand dries up, and it seems like the market has some reservations as the industry has tumbled by 7.2% over the past six months. This performance was discouraging since the S&P 500 held its ground. Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. Keeping that in mind, here is one resilient restaurant stock pinned to our Google Maps and two we're steering clear of. Market Cap: $16.55 billion Founded by two brothers in Michigan, Domino's (NYSE:DPZ) is a globally recognized pizza chain known for its creative marketing and fast delivery. Why Is DPZ Not Exciting? Lackluster 5.2% annual revenue growth over the last six years indicates the company is losing ground to competitors Projected sales growth of 5.8% for the next 12 months suggests sluggish demand Static operating margin over the last year shows it couldn't become more efficient Domino's is trading at $483.09 per share, or 27.1x forward P/E. Check out our free in-depth research report to learn more about why DPZ doesn't pass our bar. Market Cap: $804.2 million Begun as a Chicago hot dog stand in 1963, Portillo's (NASDAQ:PTLO) is a casual restaurant chain that serves Chicago-style hot dogs and beef sandwiches as well as fries and shakes. Why Does PTLO Worry Us? Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new restaurants Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of -0.2% for the last two years High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens Portillo's stock price of $12.51 implies a valuation ratio of 34.4x forward P/E. If you're considering PTLO for your portfolio, see our FREE research report to learn more. Market Cap: $6.71 billion Founded by Norman Brinker in Dallas, Brinker International (NYSE:EAT) is a casual restaurant chain that operates the Chili's, Maggiano's Little Italy, and It's Just Wings banners. Why Are We Positive On EAT? Same-store sales growth averaged 11.7% over the past two years, showing it's bringing new and repeat diners into its restaurants Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient Free cash flow margin increased by 4.2 percentage points over the last year, giving the company more capital to invest or return to shareholders At $151 per share, Brinker International trades at 16.3x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it's free. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
Yahoo
14-05-2025
- Business
- Yahoo
3 Reasons to Avoid DPZ and 1 Stock to Buy Instead
While the broader market has struggled with the S&P 500 down 1% since November 2024, Domino's has surged ahead as its stock price has climbed by 11.9% to $488 per share. This performance may have investors wondering how to approach the situation. Is there a buying opportunity in Domino's, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it's free. We're happy investors have made money, but we don't have much confidence in Domino's. Here are three reasons why there are better opportunities than DPZ and a stock we'd rather own. A company's long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last six years, Domino's grew its sales at a tepid 5.2% compounded annual growth rate. This fell short of our benchmark for the restaurant sector. Forecasted revenues by Wall Street analysts signal a company's potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite. Over the next 12 months, sell-side analysts expect Domino's revenue to rise by 5.7%, close to its 5.2% annualized growth for the past six years. This projection doesn't excite us and implies its newer menu offerings will not lead to better top-line performance yet. Operating margin is a key profitability metric because it accounts for all expenses keeping the business in motion, including food costs, wages, rent, advertising, and other administrative costs. Looking at the trend in its profitability, Domino's operating margin might fluctuated slightly but has generally stayed the same over the last year. This raises questions about the company's expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Its operating margin for the trailing 12 months was 18.6%. Domino's isn't a terrible business, but it isn't one of our picks. With its shares beating the market recently, the stock trades at 27.2× forward P/E (or $488 per share). This valuation tells us a lot of optimism is priced in - you can find better investment opportunities elsewhere. We'd suggest looking at the Amazon and PayPal of Latin America. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
Yahoo
13-05-2025
- Business
- Yahoo
DPZ Q1 Earnings Call: New Menu Launches and Aggregator Partnerships Shape Outlook
Fast-food pizza chain Domino's (NYSE:DPZ) missed Wall Street's revenue expectations in Q1 CY2025 as sales rose 2.5% year on year to $1.11 billion. Its non-GAAP profit of $4.33 per share was 6.3% above analysts' consensus estimates. Is now the time to buy DPZ? Find out in our full research report (it's free). Revenue: $1.11 billion vs analyst estimates of $1.13 billion (2.5% year-on-year growth, 1.2% miss) Adjusted EPS: $4.33 vs analyst estimates of $4.07 (6.3% beat) Adjusted EBITDA: $230.5 million vs analyst estimates of $235.8 million (20.7% margin, 2.3% miss) Operating Margin: 18.9%, in line with the same quarter last year Free Cash Flow Margin: 14.8%, up from 9.5% in the same quarter last year Locations: 21,358 at quarter end, up from 20,755 in the same quarter last year Same-Store Sales rose 1.6% year on year (3.2% in the same quarter last year) Market Capitalization: $16.4 billion Domino's Q1 results were shaped by the introduction of its Parmesan Stuffed Crust pizza, ongoing value-focused promotions, and a challenging macroeconomic environment that impacted both delivery and carryout traffic. Management discussed the initial performance of the new stuffed crust item, which launched late in the quarter, and highlighted strategic investments in digital platforms and franchisee support as key contributors to maintaining market share amid competitive pressures. CEO Russell Weiner emphasized, 'We're excited about the impact this product will have not only this year, but as a market share driver for years to come.' Looking ahead, Domino's leadership focused on the expected benefits from its DoorDash partnership, which is set for a national rollout in the coming months. The company reiterated its strategy of combining its own digital channels with third-party aggregator platforms to reach a broader customer base. CFO Sandeep Reddy noted, 'All of our key initiatives, including aggregator partnerships and new product launches, are incorporated into our full-year outlook,' while also cautioning that continued macroeconomic headwinds could affect same-store sales expectations. Domino's management attributed Q1 performance to a combination of new product initiatives, operational improvements, and expanding digital partnerships. They also commented on the external pressures facing the quick-service restaurant (QSR) industry, including consumer spending trends and heightened competition. • Stuffed Crust Pizza Launch: The Parmesan Stuffed Crust pizza was launched in early March, representing Domino's largest new menu item in years. While it had limited impact on Q1 results due to timing, management reported strong initial customer feedback and a high proportion of orders including the new crust. Russell Weiner stated that this launch filled a major gap in the menu and is expected to contribute meaningfully to future sales. • DoorDash Aggregator Rollout: Domino's initiated a pilot with DoorDash, the largest delivery aggregator in the US, and plans a national rollout by the end of Q2. Management expects approximately 50% of the orders through DoorDash to be incremental, citing the platform's scale compared to previous partnerships. The anticipated impact is weighted toward the second half of the year. • Organizational Restructuring: In Q1, Domino's elevated Joe Jordan to Chief Operating Officer and promoted Weiking Ng to Head of International. The company also streamlined its structure, resulting in some severance expenses but aiming for greater market agility and efficiency in pursuing its 'Hungry for MORE' strategy. • Value and Loyalty Initiatives: Promotions like the 'Best Deal Ever' and ongoing enhancements to the Domino's Rewards loyalty program supported customer retention and frequency, particularly among carryout customers. Management cited the multi-year impact of loyalty on driving repeat business. • International Store Dynamics: While the international unit count declined due to closures by the Australia-based master franchisee (mainly in Japan), core international markets such as India and Canada outperformed, driven by localized value campaigns and digital channel adoption. Management's outlook for the remainder of the year is shaped by the phased rollout of new menu items, expansion of third-party delivery partnerships, and ongoing investments in customer-facing technology, all set against a backdrop of macroeconomic uncertainty and shifting consumer preferences. • Aggregator Platform Expansion: The full nationwide launch of DoorDash is expected to significantly broaden Domino's delivery reach, with management estimating that about half of the orders from this channel will be incremental to existing sales. • Loyalty and Digital Initiatives: The enhanced Domino's Rewards program is designed to attract light and infrequent users by lowering the barrier to earning rewards, which management believes will support long-term frequency growth and customer retention across both carryout and delivery segments. • International Market Volatility: Management highlighted potential risks from geopolitical instability and macroeconomic pressures in international markets. These factors are reflected in the company's conservative outlook for international same-store sales and unit expansion for the rest of the year. • Danilo Gargiulo (Bernstein): Asked about geopolitical pressures and international boycotts, to which Sandeep Reddy responded that volatility is mostly incorporated into guidance and no elevated risk for Domino's has been observed so far. • Brian Bittner (Oppenheimer): Inquired about the expected sales lift from DoorDash versus Uber Eats. Russell Weiner explained that DoorDash's pizza sales are roughly double Uber's and that this will be a key contributor in the second half. • David Tarantino (Baird): Sought more detail on the stuffed crust pizza's impact. Weiner replied that it was too early for a major effect, but early adoption and feedback are promising, with further data to come as repeat purchases are tracked. • Peter Saleh (BTIG): Questioned potential headwinds from tariffs and supply chain constraints on US unit growth. Reddy affirmed the 175 net new store target, stating that franchisee economics remain compelling and tariffs are not a material concern. • Sara Senatore (Bank of America): Asked how persistent macroeconomic headwinds might impact the 3% same-store sales target. Both executives said their guidance assumes a tough environment and is back-half weighted due to the timing of initiatives, but further deterioration could present downside risk. In coming quarters, the StockStory team will be monitoring (1) the impact of the DoorDash rollout on delivery traffic and overall sales mix, (2) adoption rates and repeat purchase patterns for the Parmesan Stuffed Crust pizza, and (3) the pace of domestic and international store openings relative to management's goals. Additional attention will be paid to how Domino's navigates macroeconomic pressures and competitive value promotions as the year progresses. Domino's currently trades at a forward P/E ratio of 26.9×. At this valuation, is it a buy or sell post earnings? See for yourself in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today. 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Yahoo
29-04-2025
- Business
- Yahoo
Domino's Pizza price target raised to $550 from $500 at RBC Capital
RBC Capital raised the firm's price target on Domino's Pizza (DPZ) to $550 from $500 and keeps an Outperform rating on the shares following a Q1 report the firm calls 'mixed.' While international same-store sales beat expectations and the company continues to gain share in the U.S. in a challenged consumer backdrop, and the company reiterated 2025 guidance for international and U.S. same-store sales and unit growth, on the less positive side, consumer weakness, particularly low-income, is impacting the overall pizza category, which Domino's is not immune from despite ongoing share gains, the analyst tells investors. While the fiscal year comp guidance was reiterated, RBC estimates adding Doordash (DASH) could be driving nearly one-third of the U.S. same-store sales growth this year, the firm added. Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter. Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox. Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See the top stocks recommended by analysts >> Read More on DPZ: Disclaimer & DisclosureReport an Issue Domino's Pizza: Positioned for Growth and Stability Amid Market Challenges Positive Outlook for Domino's Pizza: Strategic Partnerships and International Growth Drive Buy Rating Domino's Pizza price target raised to $510 from $500 at Stifel Domino's Pizza price target raised to $530 from $500 at BTIG Amazon sellers pull away from Prime Day, IBM to invest in U.S.: Morning Buzz Sign in to access your portfolio
Yahoo
29-04-2025
- Business
- Yahoo
3 Mid-Cap Stocks Facing Headwinds
Mid-cap stocks often strike the right balance between having proven business models and market opportunities that can support $100 billion corporations. However, they face intense competition from scaled industry giants and can be disrupted by new innovative players vying for a slice of the pie. Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here are three mid-cap stocks to swipe left on and some alternatives you should look into instead. Market Cap: $16.8 billion Founded by two brothers in Michigan, Domino's (NYSE:DPZ) is a globally recognized pizza chain known for its creative marketing and fast delivery. Why Does DPZ Fall Short? 5.2% annual revenue growth over the last six years was slower than its restaurant peers Projected sales growth of 5.6% for the next 12 months suggests sluggish demand Operating margin didn't move over the last year, showing it couldn't increase its efficiency Domino's stock price of $492 implies a valuation ratio of 27.5x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than DPZ. Market Cap: $17.1 billion Founded in 1913 with bleach as the sole product offering, Clorox (NYSE:CLX) today is a consumer products giant whose product portfolio spans everything from bleach to skincare to salad dressing to kitty litter. Why Are We Hesitant About CLX? Flat sales over the last three years suggest it must innovate and find new ways to grow Demand will likely be weak over the next 12 months as Wall Street expects flat revenue Free cash flow margin was stuck in limbo over the last year At $138.28 per share, Clorox trades at 19.6x forward price-to-earnings. If you're considering CLX for your portfolio, see our FREE research report to learn more. Market Cap: $15.53 billion Founded in 1923 and serving as a critical link in the pharmaceutical supply chain, West Pharmaceutical Services (NYSE:WST) manufactures specialized packaging, containment systems, and delivery devices for injectable drugs and healthcare products. Why Is WST Not Exciting? Flat sales over the last two years suggest it must find different ways to grow during this cycle Day-to-day expenses have swelled relative to revenue over the last two years as its adjusted operating margin fell by 5.7 percentage points Diminishing returns on capital suggest its earlier profit pools are drying up West Pharmaceutical Services is trading at $217 per share, or 33.8x forward price-to-earnings. Check out our free in-depth research report to learn more about why WST doesn't pass our bar. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
