Domino's Pizza Inc.
) touched a 52-week high of $60.69 during the trading session on
Jun 4 and eventually closed at $60.18. The closing share price of
this pizza chain has been trending higher since it released its
first-quarter 2013 earnings on Apr 30, 2013.
The adjusted closing price of this restaurant company on Jun 4,
2013, represented a staggering one-year return of about 102.8%.
Average volume of shares traded over the last three months stands
at approximately 1,227K.
We believe, despite hitting its 52-week high, this Zacks Rank #2
(Buy) stock has plenty of upside left, given strong estimate
revisions over the last 60 days and expected long-term earnings
growth rate of 14.3%.
Impressive first-quarter 2013 results - including an earnings
surprise of 5.4%, sales surprise of 1.1%, a solid 25.5% jump in
adjusted earnings per share and 8.6% year-over-year increase in
revenues were the key growth drivers.
Higher revenues, lower interest expense, slightly lower tax rate
and share repurchases pushed up earnings during the quarter.
Total revenue climbed 8.6% year over year to $417.6 million on
the back of higher comparable restaurant sales growth and unit
An operating margin expansion of 130 basis points driven by
better product-mix was also a high point in its financial
results. Moreover, Domino's has now delivered positive earnings
surprises in the last 4 quarters with an average beat of 5.22%.
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A strong overseas presence, traction in digital ordering and its
foray into the Pan Pizza category will be a tailwind for the
company's domestic business.
Upward Trend in Estimate Revisions
Over the last 60 days, 7 of the 9 estimates for 2013 have been
revised upward, lifting the Zacks Consensus Estimate for earnings
per share by 3.9% to $2.40. For 2014, 6 of the 9 estimates moved
north, helping the Zacks Consensus Estimate advance 3.4% to $2.73
Other Stocks to Consider
Others players in the same industry, which look attractive at the
current levels include
The AFC Enterprises Inc.
Brinker International Inc.
Burger King Worldwide Inc.
) all carrying a Zacks Rank #2 (Buy).