DPZ Stock Rises 10% in 3 Months: Should You Act Now or Hold Steady?

Core Viewpoint - Domino's Pizza, Inc. (DPZ) has shown strong stock performance, gaining 9.9% over the past three months, outperforming both the Zacks Retail - Restaurants industry and the S&P 500 [1] Group 1: Performance and Strategy - DPZ's success is driven by its solid digital ordering system, the Hungry for MORE strategy, and a resilient asset-light model [1] - The company has opened approximately 1,750 stores since 2015, reinforcing its market leadership and ensuring long-term profitability for franchisees [7] - The Hungry for MORE strategy focuses on value, innovation, and market share growth, resonating with value-conscious consumers [5][6] Group 2: Financial Outlook - Domino's expects U.S. same-store sales growth of 3% or more for fiscal 2024, supported by a strong pipeline of promotions and innovative product launches [9] - The Zacks Consensus Estimate for fiscal 2024 earnings per share (EPS) has increased from $16.74 to$16.82 in the past 60 days [14] Group 3: Challenges and Competition - The international segment, which represents about half of global retail sales, is facing challenges from macroeconomic and geopolitical pressures [8][10] - DPZ revised its 2024 global net store growth guidance from 825-925 to 800-850 due to challenges in international markets [11] - Increased competition from established quick-service restaurant chains and aggressive promotions by competitors are putting pressure on Domino's market share [11] Group 4: Valuation - DPZ is trading at a forward 12-month price-to-earnings (P/E) multiple of 25.76X, below the industry average of 26.32X, indicating a discount relative to peers [12]