Domino's Pizza Inc

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DPZ : NYSE : Services
$149.80 -0.68 | -0.45%
Today's Range: 149.51 - 150.84
Avg. Daily Volume: 718,600
08/24/16 - 3:59 PM ET

Financial Analysis


DOMINO'S PIZZA INC's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have grown, and although the growth in revenues has outpaced the average competitor within the industry, the net income growth has not. DOMINO'S PIZZA INC has weak liquidity. Currently, the Quick Ratio is 0.74 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has significantly decreased by 53.71% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)547.34488.62
EBITDA ($mil)112.2499.91
EBIT ($mil)103.792.23
Net Income ($mil)49.2645.91


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)129.74122.71
Total Assets ($mil)652.28597.9
Total Debt ($mil)2214.051527.4
Equity ($mil)-1914.75-1245.66


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin32.9532.82
EBITDA Margin20.520.44
Operating Margin18.9518.88
Sales Turnover3.553.48
Return on Assets29.9429.41
Return on Equity0.00.0
Debt Q2 FY16 Q2 FY15
Current Ratio1.261.5
Debt/Capital7.45.42
Interest Expense25.2119.01
Interest Coverage4.114.85


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)48.3454.8
Div / share0.380.31
EPS0.980.81
Book value / share-39.61-22.73
Institutional Own % n/a n/a
Avg Daily Volume742420.0972762.0

Valuation


BUY. This stock's P/E ratio indicates a premium compared to an average of 31.03 for the Hotels, Restaurants & Leisure industry and a significant premium compared to the S&P 500 average of 25.30. Normally, for additional comaprison, we would look at the price-to-book ratio; however, this company's price-to-book ratio is negative making the value useless for comparisons. The current price-to-sales ratio is well above the S&P 500 average and above the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, DOMINO'S PIZZA INC seems to be trading at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
DPZ 39.55 Peers 31.03   DPZ 27.24 Peers 14.46

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

DPZ is trading at a significant premium to its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

DPZ is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
DPZ 30.03 Peers 25.37   DPZ 2.02 Peers 2.85

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

DPZ is trading at a significant premium to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

DPZ trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
DPZ NM Peers 40.41   DPZ 20.00 Peers 31.54

Neutral. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

DPZ's P/B is negative making this valuation measure meaningless.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, DPZ is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
DPZ 3.08 Peers 2.88   DPZ 11.16 Peers 5.70

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

DPZ is trading at a valuation on par with its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

DPZ has a sales growth rate that significantly exceeds its peers.

 

 

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