Why Domino's Pizza Was Such a Tasty Stock on Friday
One trading session after Domino's Pizza (NYSE: DPZ) delivered its latest set of quarterly earnings figures, the company's shares zoomed more than 5% higher on Friday. A clutch of pundits tracking the stock weighed in on those results, and investors chose to accept the more positive takes. That 5%-plus share price rise was far higher than the 0.8% advance of the S&P 500 across the day.
A powerful earnings beat
For its third quarter, Domino's didn't manage to move the needle much on key fundamentals. Total sales rose by less than 4% year over year to a shade below $4.4 billion. That was on the back of 3% growth in same-store sales in the company's native U.S. and a 0.8% rise in international restaurants. Meanwhile, generally accepted accounting principles (GAAP) net income slipped by less than 1% over that stretch of time to slightly under $147 million, or $4.19 per share.
The pie slinger missed on the average analyst estimate of $1.1 billion for sales. However, it absolutely obliterated the mere $3.63 per share anticipated for bottom-line profitability.
Domino's management reiterated the company's existing full-year guidance, which calls for a 6% growth in sales compared to 2023 and an 8% increase in income from operations. It feels it will post similar growth figures in 2025.
A busy Friday for Domino's analysts
Domino's has many analysts tracking its fortunes, and by my count, nine of them cut their price targets on the stock. At the same time, though, two raised their targets, while Evercore ISI's David Palmer went as far as to remove it from his firm's tactical underperform list while reiterating his outperform (i.e., buy) recommendation. His peer Brian Harbour of Morgan Stanley was one of the price target raisers, lifting his to $520 per share from the preceding $515 and maintaining his overweight (buy) designation.
Should you invest $1,000 in Domino's Pizza right now?
Before you buy stock in Domino's Pizza, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Domino's Pizza wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $826,130!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of October 7, 2024
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Domino's Pizza. The Motley Fool has a disclosure policy.
Why Domino's Pizza Was Such a Tasty Stock on Friday was originally published by The Motley Fool