With the two factors of debt becoming more expensive and the pandemic boom over, DPZ has been returning to a more normalized environment. Therefore, we could see them have to refinance a good portion of this at even higher rates.ĭPZ Debt Maturity Schedule (Domino's Pizza) The main risk here is that in a few years, rates may not come down substantially to provide cheaper debt. In this case, that's an eternity and probably a recession away. However, it is in year three that they might have a bit of a problem. They will have no problem paying this off. The debt obligations coming due in the next year and two years are minimal.
The FCF, in this case, easily clears the requirements of the company for meeting its debt obligation. They are constantly buying back shares, but as of the latest data of shares outstanding against the current quarterly dividend, that should see an outflow of $42.760 million for dividends. Net interest expenses in the last quarter came down to $44.156 million from $46.823 million previously. They provided an FCF of $95.651 million for the latest quarter.
They noted in the latest quarter that debt once again trickled down to $5.01 billion due to repayment. In total, they had 20,008 restaurants at the end of March 26th, 2023, with 285 company owned.ĭPZ Total Debt Vs Earnings (Portfolio Insight)
They own enough stores to get a good sample to test markets, and that is about it. 99% of DPZ's stores are owned and operated by franchisees.
DOMINOS STOCK VALUATION FREE
Debt can often be seen as a negative for the company, but thanks to its lean business model and free cash flow generation, it shouldn't really be a problem. They still have $380.3 million in share repurchase authorization, which could make even more sense now that the share price is quite cheap.ĭoing these repurchases helped the companies' EPS grow even further and faster. The latest quarter saw the repurchase and retirement of around 100.5k shares worth around $30.1 million. They are actually still doing these buybacks, but they've slowed down. The stock went from extremely overvalued to now being well below the fair value estimate based on the historical P/E.ĭPZ Fair Value Price Range (Portfolio Insight)Īn added benefit was the fact that they could ramp up debt while simultaneously doing significant buybacks.ĭPZ Shares Outstanding Vs. They've more recently been coming down from the pandemic benefits, and the share price has certainly shown this to be the case. There was also plenty of stimulus to keep consumers flush with cash. That isn't quite as rosy as the Morningstar valuation, but it indicates some optimism.ĭPZ was a pandemic darling as it benefited significantly from consumers being stuck at home during lockdowns. analysts rate the stock a "Buy" with an average price target consensus of $347.46. Overall, Morningstar isn't alone, as Wall St. However, even with the reduction that was citing "soft traffic and delivery headwinds," it would indicate some substantial upside.
DOMINOS STOCK VALUATION UPDATE
This was originally included in the monthly Cash Builder Opportunities portfolio fair value update piece.ĭomino's Pizza ( NYSE: DPZ) saw its fair value estimate drop since our last update, based on Morningstar's valuation. It also operates five dough manufacturing and supply chain centers in Canada.Written by Nick Ackerman. The Company operates 22 regional dough manufacturing and supply chain centers, two thin crust manufacturing facilities, one vegetable processing center and one center, providing equipment and supplies to its United States and certain international stores. The international franchise segment is comprised of a network of franchised stores in approximately 90 international markets. The segment also operates a network of approximately 286 U.S. stores segment consists primarily of its franchise operations, which consist of approximately 6,400 franchised stores located in the United States. stores, international franchise and supply chain. The Company operates through three segments: U.S. is a pizza company, which operates two distinct service models within its stores with a significant business in both delivery and carryout. Consumer Discretionary : Hotels, Restaurants & Leisure | Mid Cap Blend Company profileĭomino’s Pizza, Inc.
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