NEW YORK ( TheStreet) -- Domino's Pizza (NYSE: DPZ) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins. 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 122.51% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, DPZ should continue to move higher despite the fact that it has already enjoyed a very nice gain 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. During the past fiscal year, DOMINO'S PIZZA INC increased its bottom line by earning $1.71 versus $1.44 in the prior year. This year, the market expects an improvement in earnings ($1.94 versus $1.71).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry average. The net income increased by 27.9% when compared to the same quarter one year prior, rising from $24.17 million to $30.91 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 14.1%. Since the same quarter one year prior, revenues slightly increased by 4.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.17 is sturdy.
-- Written by a member of TheStreet RatingsStaff