u/Company-Charts ·
Reddit — r/ValueInvesting
· March 29, 2026 at 03:32
· ⬆ 42 pts
· 💬 48 comments
| View on Reddit ↗
AI Summary
Summary
The post analyzes Domino's Pizza (DPZ) as a potential value opportunity, arguing it is trading at historically low valuation multiples after a significant price decline.
The author's thesis is that DPZ's strong historical growth, consistent financial execution, and ongoing international expansion are not reflected in its current price, implying significant upside if valuations revert to their historical mean.
Quality assessment: This is well-researched DD. The author provides extensive historical financial data, valuation percentiles, growth rate analysis, and a basic DCF model to support the argument.
Score42
Comments48
Upvote %92%
▶ Full Post Text
Sell more pizzas. Down 35% from its ATH, Trading below historical percentiles for the last 15 years across multiple metrics:
|Metric|Latest Per Share Value (TTM)|Current Ratio|Historical Percentile (15 Years)|
|:-|:-|:-|:-|
|P/E|17.57|19.81|6.6%|
|P/S|144.29|2.41|22.5%|
|P/FCF|19.86|17.53|10.4%|
|P/GP|6.04|6.04|11.8%|
|P/CFO|15.05|15.05|10.4%|
Dominos additionally does not have any plans to stop their international expansion nor does its revenue growth. DPZ has over the last 57 quarters grown their revenue 91% of the time, their EPS 84% of the time and their FCF 68% of the time.
**Growth Rates (1Y to 7Y)**
|Metric|1-Yr Growth|2-Yr CAGR|3-Yr CAGR|4-Yr CAGR|5-Yr CAGR|6-Yr CAGR|7-Yr CAGR|
|:-|:-|:-|:-|:-|:-|:-|:-|
|Revenue|7.27%|6.79%|4.70%|5.70%|6.79%|8.94%|8.94%|
|Gross Profit|9.12%|8.69%|8.07%|6.51%|7.46%|9.49%|9.75%|
|Net Income|5.27%|9.48%|11.94%|6.73%|7.23%|10.68%|11.21%|
|Cash Flow From Operating Activities|29.54%|17.73%|20.66%|7.45%|9.12%|11.79%|14.26%|
|Free Cash Flow (Simple)|35.73%|20.33%|18.65%|7.53%|9.32%|11.92%|17.24%|
**Growth Rates (8Y to 14Y)**
|Metric|8-Yr CAGR|9-Yr CAGR|10-Yr CAGR|11-Yr CAGR|12-Yr CAGR|13-Yr CAGR|14-Yr CAGR|
|:-|:-|:-|:-|:-|:-|:-|:-|
|Revenue|11.95%|12.62%|13.71%|13.74%|13.60%|13.30%|12.78%|
|Gross Profit|15.53%|15.81%|16.70%|16.80%|16.20%|15.87%|15.54%|
|Net Income|14.79%|16.93%|17.61%|17.96%|17.74%|18.64%|18.11%|
|Cash Flow From Operating Activities|15.79%|16.49%|15.98%|19.11%|17.44%|17.05%|17.28%|
|Free Cash Flow (Simple)|17.65%|17.14%|16.42%|21.61%|18.24%|17.13%|17.07%|
While I don't put much weight into forward P/Es it is at 16 compared to its current ratio of 19.81
Doing a reverse DCF across EPS/FCF/CFO (using 15x multiple, 10 year forecast, 10% discount rate and last share price of 348.14) gives me implied growth rates of 7% for EPS, 5.2% for FCF and 3.2% for CFO.
Even doing a fast DCF with a 10% growth rate for DPZ over the next 5 years, at a 10% discount rate and a 15x multiple on its last FCF value of 19.86 gives us 14% upside. If there's a return to its mean multiple average of what looks like to be 30-25 over the last 10 years, there's a lot more meat on the bone here. I like the company from a quality perspective and the simplicity of the business I think that the current price weakness is an opportunity here.
DPZ is trading at or near 15-year historical lows across key valuation metrics (P/E, P/FCF, P/CFO) while maintaining a multi-decade record of consistent revenue, EPS, and FCF growth. The market's current pricing implies very low future growth (3-7% per reverse DCF), which is significantly below the company's demonstrated long-term track record and expansion plans. The disconnect between durable business quality/historical growth and depressed valuations creates a margin of safety and potential for double-digit returns from both earnings growth and multiple expansion. A permanent de-rating of the stock's multiple, a severe slowdown in international expansion, or a failure to maintain historical growth rates in revenue and cash flow.
This Reddit post, published March 29, 2026,
features u/Company-Charts
discussing DPZ.
1 trade idea extracted by AI with direction and confidence scoring.