Domino's Pizza Inc. Stock Downgraded (DPZ)
NEW YORK (
)
(NYSE:
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share and increase in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
Highlights from the ratings report include:
- Powered by its strong earnings growth of 33.33% and other important driving factors, this stock has surged by 92.73% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- DOMINO'S PIZZA INC has improved earnings per share by 33.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, DOMINO'S PIZZA INC increased its bottom line by earning $1.44 versus $1.38 in the prior year. This year, the market expects an improvement in earnings ($1.66 versus $1.44).
- Net operating cash flow has increased to $40.69 million or 24.72% when compared to the same quarter last year. In addition, DOMINO'S PIZZA INC has also vastly surpassed the industry average cash flow growth rate of -87.38%.
- The gross profit margin for DOMINO'S PIZZA INC is currently lower than what is desirable, coming in at 29.10%. Regardless of DPZ's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, DPZ's net profit margin of 5.90% is significantly lower than the same period one year prior.
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Domino's Pizza, Inc., through its subsidiaries, operates as a pizza delivery company in the United States and internationally. The company sells and delivers pizzas under the Domino's Pizza brand name. The company has a P/E ratio of 30.6, above the average leisure industry P/E ratio of 21.7 and above the S&P 500 P/E ratio of 17.7. Domino's Pizza has a market cap of $1.97 billion and is part of the
sector and
industry. Shares are down 3.9% year to date as of the close of trading on Thursday.
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-- Written by a member of TheStreet Ratings Staff
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