Domino’s Pizza inc. (DPZ) reported second-quarter earnings early Thursday morning. While the company’s profits surpassed analyst expectations, the focus was on a disappointing revenue miss. As a result, the stock is down more than 12% so far today. Here are the results:

  • EPS: $4.03 per share compared to the $3.68 consensus
  • Revenue: $1.098 billion compared to the $1.103 billion consensus

Net income came out to $141.9 million, well above the $1.09.4 million reported this time last year. Even revenue got a lift year over year from just $1.025 billion in 2023. 

CEO Russel Weiner was optimistic about the company’s performance in Q2. He said this was the second quarter in a row in which the company delivered healthy US comp performance by maintaining profitable orders. Weiner also pointed to the 175 new stores opened during the quarter.

However, the revenue miss was all the market seemed to focus on – along with issues with a master franchisee that will affect new store openings. 

It is still forecasting more than 175 new store openings here in the US between now and 2028. But, international openings will fall way short of its original guidance, which was set as high as 925 new store openings. Now, that target has been set between 175-275 stores.

Domino’s Pizza Enterprises (DPE) is one of the company’s master franchisees, and is currently facing challenges. The two are working together to get a better sense of the effect these challenges will have on the goals for new store openings.

In the meantime, though, DPZ has fallen 22% in the past month, and today’s news will only strengthen that negative price trend. So, is this your sign to sell the stock if you haven’t already?

We’ve taken a closer look through the VectorVest stocks software and see 3 things you need to see.

DPZ Has Good Upside Potential and Very Good Safety, But Poor Timing is Holding it Back

VectorVest helps you win more trades with less work by delivering clear, actionable insights in just 3 simple ratings: relative value (RV), relative safety (RS), and relative timing (RT).

Each sits on a scale of 0.00-2.00 with 1.00 being the average, making interpretation quick and easy. You’re even presented with a buy, sell, or hold recommendation for any given stock at any given time based on its overall VST rating. Here’s what we found for DPZ:

  • Good Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (forecasted 3 years out), AAA corporate bond rates, and risk. It’s a much better indicator than the typical comparison of price to value alone. DPZ has a good RV rating of 1.20.
  • Very Good Safety: The RS rating is a risk indicator. It’s calculated from an analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. DPZ has a very good RS rating of 1.28.
  • Poor Timing: The RT rating is based on the direction, dynamics, and magnitude of the stock’s price movement day over day, week over week, quarter over quarter, and year over year. This is where the issue lies for DPZ, as it has a poor RT rating of 0.58.

The overall VST rating of 1.04 is fair for DPZ, but the stock is still rated a SELL amidst the continued downward pressure on its price. 

Before you do anything else, learn more about this opportunity with a free stock analysis at VectorVest and transform your trading strategy for the better!

Dominos Drops 12% on Weak Revenue, Decreased Store Openings: Is it Time to Sell DPZ?

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VectorVest advocates buying safe, undervalued stocks, rising in price. DPZ dropped 12% today, making it a 20% loss so far on the week, after disappointing revenue performance and new store forecast. The stock itself has good upside potential and very good safety, but poor timing is weighing it down.

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