We believe that Domino's Pizza (DPZ) is a great company that is worth over $500 a share, making the stock undervalued. Here's why.
What is Good About Domino's Pizza's Stock?
1. Domino's Pizza, Inc. (DPZ) is a stable and predictable pizza-industry leader with a great long-term track record.
2. The pizza industry is fragmented which means that the company's size and brand recognition provide it with a competitive edge over the majority of its rivals.
3. Domino's will continue to see strong growth going forward which will be fueled by their ambition to continue opening many more stores.
4. The stock dropped in October due to temporary headwinds caused by COVID-19 and cheese prices, but we believe this is temporary.
5. DPZ has an amazing Return on Capital Employed of 73.4% in the past 12 months which is much better than its peers, and it is usually even higher than that (pre-COVID).
6. Their business model requires low capital expenditures.
7. We believe DPZ is worth over $500 a share, making the stock undervalued (valuation calculation in full article).