Long Trade Idea
Enter your long position between $380.81 (Friday’s intra-day low) and $390.01 (Friday’s intra-day high).
Market Index Analysis
Domino’s Pizza (DPZ) is a member of the S&P 500 Index.
This index has retreated from record highs and decreasing bullish trading volumes suggest more downside pressure ahead.
The Bull Bear Power Indicator of the S&P 500 Index is bearish with a descending trendline.
Market Sentiment Analysis
Equity futures point to a lower opening amid renewed tariff uncertainty. The US Supreme Court ruled against President Trump’s tariffs, placing the US government on the hook for a messy refund process for approximately $175 billion. President Trump lashed out immediately, imposed a 10% global tariff on all imports, and then raised it to 15%. Fourth-quarter GDP missed expectations badly, and the PCE inflation indicator remained sticky at 3.0%. Concerning earnings, NVIDIA, Domino’s Pizza, Home Depot, and Warner Bros. will report this week.
Domino’s Pizza Fundamental Analysis
Domino’s Pizza is the world’s largest pizza chain, with over 21,000 locations across 83 countries and over 5,700 cities. It is well known for its 30-minute-or-less delivery promise.
So, why am I bullish on DPZ ahead of its earnings release?
Expectations call for Domino’s Pizza to deliver earnings per share of $5.36, up 9.6% year-over-year, on revenues of $1.52 billion, up 4.9%. I am slightly more bullish, driven by its complete integration with Uber Eats and DoorDash, its international footprint, which is a core revenue driver, its “Hungry for MORE” strategy, and loyalty program enhancements. Berkshire Hathaway has been buying DPZ shares over the past four quarters, and I expect a post-earnings rally driven by an earnings beat.
Metric | Value | Verdict |
P/E Ratio | 22.47 | Bullish |
P/B Ratio | Negative | Bearish |
PEG Ratio | 2.27 | Bullish |
Current Ratio | 1.61 | Bearish |
ROIC-WACC Ratio | Positive | Bullish |
The price-to-earning (P/E) ratio of 22.47 makes DPZ an inexpensive stock. By comparison, the P/E ratio for the S&P 500 is 29.70.
The average analyst price target for DPZ is $482.97. This suggests excellent upside potential with decreasing downside risks.
Domino’s Pizza Technical Analysis
Today’s DPZ Signal
The DPZ D1 chart shows price action breaking out above its horizontal support zone.
It also shows price action between its descending 0.0% and 38.2% Fibonacci Retracement Fan level.
The Bull Bear Power Indicator is bearish with an ascending trendline.
The average bullish trading volumes have increased during the breakout.
DPZ matched the S&P 500 move to the upside last week, a bullish confirmation.
My DPZ Long Stock Trade
DPZ Entry Level: Between $380.81 and $390.01
DPZ Take Profit: Between $433.57 and $442.35
DPZ Stop Loss: Between $361.68 and $367.24
Risk/Reward Ratio: 2.76
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