Domino's: Restaurant Recovery Will Likely Leave Pizza Places Behind
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YR Research5.13K FollowersFollow5ShareSavePlay(7min)CommentsSummaryDomino's Pizza is reiterated as a "Hold" due to limited upside despite recent growth and stable margins.DPZ's franchise model shields corporate margins, but flat margin expansion signals limited operational leverage benefits.The current valuation at 22x next year's EPS reflects fair expectations; significant upside is likely only below a 20x multiple.Peers with higher growth trade at modest premiums, suggesting DPZ lacks catalysts for outsized multiple expansion upon recovery. ma-no/iStock via Getty Images To say it wasn't a great year for the restaurant sector would be an understatement. Legendary safe-haven compounders like Domino's Pizza, Inc. (DPZ) and McDonald's (MCD) have severely underperformed the market, while investor darlings like Chipotle (This article was written byYR Research5.13K FollowersFollowI aim to invest in companies with perfect qualitative attributes, buy them at an attractive price based on fundamentals, and hold them forever. I hope to publish articles covering such companies approximately 3 times per week, with extensive quarterly follow-ups and constant updates.I manage a concentrated portfolio targeted at avoiding losers and maximizing exposure to big winners. This means that often I'll rate great companies at a 'Hold' because their growth opportunity is below my threshold, or their downside risk is too high.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.