Domino’s Pizza, Inc. (DPZ): what the price assumes

In the published model solve dated 2026-Q2, anchored at $350.00, Domino’s Pizza, Inc. (DPZ) is priced for -3.7% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-26.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/DPZ

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that call it expensive: Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.6%); the inversion above states its own rate.

Per-Model Detail (n=3)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• Most of the revenue is not pizza: the supply chain business that manufactures dough and sells food to franchisees is 63% of the top line, while U.S. and international royalties together come to about a fifth.
• Units carried 2025 more than traffic did, with same store sales up 3.0% in the U.S. and 1.9% internationally excluding currency, alongside global net store growth of 776 stores.
• The competitive squeeze is for drivers as well as diners: the 10-K warns that Competition for both customers and drivers from these order and delivery aggregators and other food delivery services has substantially increased.

Bull Case

Read a mature company the way a mature company should be read. The question is not how quickly it grows but how dependably the cash shows up and who has first claim on it. Framed that way, Domino's stops looking like a restaurant chain. Supply chain, the business that mills dough and ships food to franchisees, accounts for 63% of revenue. Royalties and fees from U.S. and international franchisees are about a fifth. Company-owned stores are 8%. Franchisees are in the pizza business. Domino's is in the business of selling them ingredients and renting them the brand, and those are two of the most durable revenue shapes in food.

The distribution half is compounding quietly. Supply chain segment income rose $39.5 million, or 14.1%, in 2025, which the 10-K attributes to improved supply chain gross margin. The physical base behind that is real: 22 regional dough manufacturing and supply chain centers, two thin crust manufacturing facilities and one vegetable processing center in the United States, with five more regional centers in Canada. Every dollar a franchisee spends on flour and cheese is a dollar of Domino's revenue, so the company captures the input cost of its own franchise system rather than watching it leave.

The store base is still expanding, and in a mature franchise that is where growth lives. Global retail sales excluding currency effects rose 5.4% in 2025, with U.S. retail sales up 4.8% and international retail sales up 5.9% excluding currency. Same store sales rose 3.0% in U.S. stores and 1.9% internationally on the same basis, and the system added 776 stores on a net basis over the year. Modest traffic growth multiplied across a widening base is how these businesses have always compounded.

Profitability lands exactly where the mix says it should, which is the part a peer screen gets wrong. Domino's converts about 19.5% of revenue into operating profit. The pure franchisors sit far above that: MCD at a 46.3% operating margin, YUM at 31.5%, WING at 27.0%, QSR at 24.8%. The food distributors sit far below: SYY at 3.6%, CHEF at 3.65%, USFD at 3.0%, PFGC at 1.25%. A company that is roughly two-thirds distributor and one-third franchisor should land between them, and it does. Anyone benchmarking this revenue base against a restaurant group is comparing two different businesses stapled together to one of the halves.

Financing is the quiet advantage. The borrowings are securitized senior secured notes carrying fixed coupons such as 3.082% and 4.118%, and trailing operating profit covers the interest bill close to five times over. The share count has come down about 1.9% a year over four years. Cheap fixed-rate money against a contractual royalty stream is a structure most restaurant companies cannot build, and it is why the leverage here reads differently than the raw figure suggests.

Bear Case

For thirty years the defensible thing about Domino's was that it owned delivery. It had the drivers, the routing, the ovens placed for a fifteen-minute radius, and nobody else could bring hot food to a door at that cost. That advantage is being dismantled in public, and the company's own filing describes the mechanism: We also compete with other restaurants, as well as order and delivery aggregation companies, which have continued to grow in size and scale in recent years. The risk section goes further, warning that Competition for both customers and drivers from these order and delivery aggregators and other food delivery services has substantially increased. Losing the customer relationship is one problem. Bidding against DoorDash for the same delivery driver in the same town is a different and more expensive one.

Domino's response has been to join them, signing multinational agreements with Uber Technologies and DoorDash to let customers order its products through those platforms. That is a sensible commercial decision and a plain admission about where demand now originates. A toll booth has been installed between the company and its customer, and the toll is not set by Domino's.

The operating data shows a business growing through unit count rather than through pull. Same store sales rose 3.0% in the U.S. and 1.9% internationally last year, before considering what food inflation contributed to those figures, while the system opened a net 776 stores. Opening stores raises royalties even if each store sells no more than it did. It also puts new units into territories the existing ones already serve.

The valuation offers a narrow defence. Only the comparable-multiple lens reaches the current price, and it does so by applying a sector reference earnings multiple. Capitalizing the free cash flow the business actually produced as a flat perpetuity at the return an equity holder should require lands at a small fraction of today's level. Read plainly: the current price is not supported by the cash the company generates now. It is supported by the expectation that the cash keeps growing, and the growth on offer is 3.0% same store sales plus new stores.

There is also less balance-sheet room than the cheap coupons suggest. Borrowings run near 4.9 billion dollars against liquid assets near 233 million dollars, and interest is covered about 4.9 times by trailing operating profit. This is a whole-business securitization, which means the equity sits behind a structure that must be refinanced on the market's terms at each anticipated repayment date rather than the company's. Certain notes from the 2015 and 2018 issues carried an anticipated repayment date of October 2025 and had already moved into the current portion of long-term debt at the last year end. Cheap money is only cheap while it lasts.

One more thing a reader should know before comparing revenue multiples. About a ninth of the top line is U.S. franchise advertising, contributed by franchisees and presented gross in the income statement with the matching expense alongside it. It adds nothing to segment profit. Any revenue-based comparison to a peer that does not run its ad fund through the accounts this way is measuring different things.

Valuation

The methods here have an unusually narrow disagreement, and the shape of it is the whole story. Only the comparable-multiple lens reaches today's price, and it gets there by holding the sector reference earnings multiple flat rather than letting it compress. The cash-capitalization lenses land far below. Capitalizing the free cash flow the company produced as a flat perpetuity at the return an equity investor should demand puts a value at a fraction of the traded price. There is no asset-based read in the set at all, and no forward-growth read that clears the bar either.

That leaves the peer comparison carrying the entire defence of the price, which is worth examining rather than accepting. Applied to Domino's, a restaurant-sector earnings multiple prices a company whose largest single revenue line is food distribution. The distributors it actually competes with on that 63% of revenue trade on very different economics: SYY runs a 3.6% operating margin on $83.6 billion of revenue, USFD 3.0% on $39.7 billion, PFGC 1.25% on $66.7 billion. Nobody applies a restaurant multiple to those. Domino's blended 19.5% operating margin is the honest number, and it is neither a franchisor's margin nor a distributor's.

Turning the price around into what it assumes gives a directional check rather than a verdict. On a whole-company basis the market is paying roughly eighteen times trailing operating profit, and running that backwards suggests the price is not asking the business to grow at all. That particular calculation carries low confidence for this company and should be treated as a cross-check, not a conclusion. What it does confirm is direction: by the standards of the group, this is not a demanding level. The multiple sits in the lower half of the range its peer group trades in.

Against that, the operating record is real and dated. Same store sales rose 3.0% in the U.S. and 1.9% internationally excluding currency last year, the system grew by a net 776 stores, and supply chain segment income rose 14.1%. A business delivering those numbers is not the business the flat-perpetuity read is describing, which is precisely why the two lenses disagree so widely.

Solvency sets the boundary rather than the value. Borrowings near 4.9 billion dollars sit against liquid assets near 233 million dollars, and interest is covered close to five times by trailing operating profit. The coupons are fixed and low, at 3.082% and 4.118% on the senior secured notes, and the share count has fallen about 1.9% a year across four years. Running with almost no cash on hand is a deliberate choice when the incoming royalties are contractual. It is also the reason a shock to those royalties would matter more here than at a company holding a buffer.

Catalysts

The second quarter of 2026 was reported on July 20, 2026, and the split inside it matched the structure of the business: quarterly revenue narrowly exceeded expectations, with supply chain growth offsetting softer restaurant demand. That is the thesis in one sentence. When diners slow down, the distribution business keeps shipping to a store count that grew by 776 units last year, and the royalty base does not shrink just because average traffic does. The same release was briefly disrupted when the company rescheduled its earnings call over technical difficulties at its webcast provider.

Sell-side reaction to the print went both directions, which is a fair reflection of a company whose two halves are moving apart. Several firms cut their targets in the days after the results while others raised theirs. Nothing in that dispersion tells the reader where the price should be; what it tells them is that the restaurant-versus-distributor question is genuinely unresolved on the street as well.

Governance changed at the same time. On July 14, 2026 the company announced the appointment of two new independent directors and elected Corie Barry as lead independent director. Board refreshment at a mature franchisor is rarely a share-price event, but a new lead independent director arriving alongside a strategic question about aggregator dependence is worth noting in the calendar.

On the filing side, the item to keep in view is the debt structure. Certain notes from the 2015 and 2018 securitized issues carried an anticipated repayment date of October 2025 and had already been reclassified into the current portion of long-term debt at the 2025 year end. Refinancing a whole-business securitization at prevailing rates, against original coupons of 3.082% and 4.118%, is the single most predictable change to the cost base over the next couple of years.

Peer Cohorts (Per Segment, With Filing Citations)

U.S. Stores (reported)

• YUM (YUM! BRANDS, INC.)
• FY2025 10-K: …yum:FranchiseSegmentMemberMember yum:TacoBellGlobalDivisionMember 2023-01-01 2023-12-31 0001041061 country:US yum:FranchiseSegmentMemberMember yum:PizzaHutGlobalDivisionMember 2023-01-01 2023-12-31 0001041061 country:US yum:FranchiseSegmentMemberMember yum:TheHabitBurgerGrillGlobalDivisionMember 2023-01-01 2023-12-31…
• FY2025 10-K: 2025-01-01 2025-12-31 0001041061 yum:OtherOutsidetheU.S.andChinaMember us-gaap:ProductMember yum:PizzaHutGlobalDivisionMember 2025-01-01 2025-12-31 0001041061 yum:OtherOutsidetheU.S.andChinaMember us-gaap:ProductMember yum:TheHabitBurgerGrillGlobalDivisionMember 2025-01-01 2025-12-31 0001041061…
• QSR (RESTAURANT BRANDS INTERNATIONAL INC.)
• FY2025 10-K: …qsr:RestaurantHoldingsMember 2024-01-01 2024-12-31 0001618756 us-gaap:IntersegmentEliminationMember us-gaap:ProductMember us-gaap:SalesChannelDirectlyToConsumerMember 2024-01-01 2024-12-31 0001618756 us-gaap:OperatingSegmentsMember us-gaap:RoyaltyMember qsr:TimHortonsMember 2024-01-01 2024-12-31 0001618756…
• FY2025 10-K: KitchenMember 2025-01-01 2025-12-31 0001618756 us-gaap:OperatingSegmentsMember us-gaap:ProductMember us-gaap:SalesChannelDirectlyToConsumerMember qsr:FirehouseSubsMember 2025-01-01 2025-12-31 0001618756 us-gaap:OperatingSegmentsMember us-gaap:ProductMember us-gaap:SalesChannelDirectlyToConsumerMember…
• WING (WINGSTOP INC.)
• FY2025 10-K: …This measure is calculated by dividing sales during the applicable period for all restaurants being measured by the number of restaurants being measured. Domestic AUV includes revenue from both company-owned and franchised restaurants. Domestic AUV allows management to assess our domestic company-owned and franchised…
• FY2025 10-K: , along with limited time offerings of special flavors, create a differentiated experience that drives demand across multiple day parts and occasions. Paired with our numerous order options (dine-in / carryout / delivery; individual / combo meals / family packs) that allow guests to enjoy Wingstop during any occasion,…
• SHAK (SHAKE SHACK INC.)
• FY2025 10-K: Commons Company-operated 11/18/2025 London, UK - Kings Cross Licensed 11/18/2025 Selden, NY - Selden Company-operated 11/19/2025 Manila, Philippines - Capitol Commons Licensed 11/28/2025 Kuala Lumpur, Malaysia - Pavilion KL Licensed 11/28/2025 Pikesville, MD - Festival at Woodholme Company-operated 11/30/2025 Phuket,…
• FY2025 10-K: SSE Holdings. Shake Shack Inc. Class A common stock trades on the New York Stock Exchange under the symbol "SHAK." Unless the context otherwise requires, "we," "us," "our," "Shake Shack," the "Company" and other similar references refer to Shake Shack Inc. and, unless otherwise stated, all of its subsidiaries,…
• CMG (CHIPOTLE MEXICAN GRILL, INC.)
• FY2025 10-K: Intellectual Property and Trademarks "Chipotle," "Chipotle Mexican Grill," "Food with Integrity," "Responsibly Raised," "Chipotle Rewards," and a number of other marks and related designs and logos are U.S. registered trademarks of Chipotle. We have filed trademark applications for a number of additional marks in the…
• FY2025 10-K: …financial condition, results of operations and cash flows. Shareholder Actions As reported in previous SEC filings, Chipotle and several of its executive officers are defendants in Michael Stradford v. Chipotle et. al., a purported shareholder class action in the U.S. District Court for the Central District of…
• MCD (McDONALD’S CORPORATION)
• FY2025 10-K: …assembling a customer's mobile order prior to arrival at the restaurant to expedite service and elevate customer satisfaction. The Company successfully deployed this initiative in its top six markets by the end of 2025. The Company has loyalty programs in 70 markets, including nearly all major markets. McDonald's…
• FY2025 10-K: …10(a) of Form 10-K (File No. 001-05231), for the year ended December 31, 2021.* (b) McDonald's Corporation Board of Directors Deferred Compensation Plan, effective January 1, 2022, incorporated herein by reference from Exhibit 10(b) of Form 10-K (File No. 001-05231), for the year ended December 31, 2021.* (c)…
• WEN (Wendy's Co)
• FY2025 10-K: …field visits are made by Wendy's personnel who review restaurant operations, including quality, service and cleanliness, and make recommendations to assist in compliance with Wendy's specifications. Supply Chain, Distribution and Purchasing As of December 28, 2025, three independent processors (five total production…
• FY2025 10-K: …2023-01-02 2023-12-31 0000030697 us-gaap:EmployeeRelocationMember wen:OrganizationalRedesignMember 2025-12-28 0000030697 us-gaap:OtherRestructuringMember wen:OrganizationalRedesignMember 2024-12-30 2025-12-28 0000030697 us-gaap:OtherRestructuringMember wen:OrganizationalRedesignMember 2024-01-01 2024-12-29 0000030697…

Supply Chain (reported)

• SYY (Sysco Corporation)
• FY2025 10-K: …in volumes from our specialty meats operations is included within "Other." The sales growth in our U.S. Foodservice Operations was driven by higher inflation in fiscal 2025. Case volumes from our U.S. Foodservice Operations increased 0.5%, as compared to fiscal 2024. This included a 1.4% decrease in local customer…
• FY2025 10-K: …not be able to pass these costs fully to our customers. Third, increased fuel costs impact the costs we incur to deliver products to our customers. Fuel costs related to outbound deliveries represented approximately 0.5% of sales during fiscal 2025, 0.5% of sales in fiscal 2024, and 0.6% of sales in fiscal 2023. Our…
• USFD (US FOODS HOLDING CORP.)
• FY2025 10-K: …reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on February 17, 2017). 10.2.5 Fourth Amendment to the Credit Agreement, dated as of November 30, 2017, by and among US Foods, Inc., the other Loan Parties party thereto, Citicorp North America, Inc. and the Lenders and other financial…
• FY2025 10-K: …spending and increase the prices we pay for products, and the costs we incur to deliver products to our customers. Fuel costs related to outbound deliveries approximated $174 million during the fiscal year ended December 27, 2025. Our activities to minimize fuel cost risk include route optimization, improving fleet…
• PFGC (Performance Food Group Company)
• FY2025 10-K: …to vending and office coffee service distributors as well as direct to customer locations including theaters and retail locations. The distribution model also includes "pick and pack" capabilities utilizing small parcel third-party carriers to deliver direct to consumers for our supplier partners and to our customers…
• FY2025 10-K: …significant customer accounts, and when it becomes aware of a specific customer's inability to meet its financial obligations to the Company, such as bankruptcy filings or deterioration in the customer's operating results or financial position, the Company records a specific reserve for bad debt to reduce the related…
• CHEF (CHEFS’ WAREHOUSE, INC.)
• FY2025 10-K: 10.19 Amendment No. 10, dated as of November 6, 2023, to the Term Loan Facility (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on July 30, 2025. 10.20 Amendment No. 11, dated as of March 18, 2024, to the Term Loan Facility (incorporated by reference to Exhibit 10.1 to the Company's Form…
• FY2025 10-K: …are scalable and can be leveraged together with targeted investments in new technology like artificial intelligence, robotics, drones and low-code development to provide the fuel to drive profitable growth. Intellectual Property We have registered and/or applied to register a variety of trademarks and serve marks…
• UNFI (UNITED NATURAL FOODS, INC.)
• FY2025 10-K: …of our suppliers are based in the United States and Canada, but we also source products from suppliers throughout the world. We believe suppliers seek to distribute their products through us because we provide access to a large customer base across the United States and Canada, distribute the majority of the…
• FY2025 10-K: …a competitive environment. Additionally, in the fourth quarter of fiscal 2025, we became aware of unauthorized activity on certain of our information technology systems. We promptly activated our incident response plan and implemented containment measures, including proactively taking certain systems offline (the…

International Franchise (reported)

• YUM (YUM! BRANDS, INC.)
• FY2025 10-K: …individually distinct from the ongoing services we provide to our franchisees. As a result, upfront franchise fees are recognized as revenue over the term of each respective franchise or sub-franchise agreement. Revenues for these upfront franchise fees are recognized on a straight-line basis, which is consistent…
• FY2025 10-K: …financial investment by such franchisees. Our Concepts may be unable to successfully implement strategies that we believe are necessary for growth if our Concepts' franchisees do not participate, which may harm our growth prospects and financial results. Additionally, the failure of our Concepts' franchisees to focus…
• QSR (RESTAURANT BRANDS INTERNATIONAL INC.)
• FY2025 10-K: , 2025. See Note 7, " BK China, " to the accompanying consolidated financial statements included in Part II, Item 8 "Financial Statements and Supplementary Data" for additional information regarding this transaction. Franchise and Development Agreements Our franchise model is designed to drive both operational…
• FY2025 10-K: …us-gaap:SalesChannelThroughIntermediaryMember qsr:InternationalSegmentMember 2023-01-01 2023-12-31 0001618756 us-gaap:OperatingSegmentsMember us-gaap:ProductMember us-gaap:SalesChannelDirectlyToConsumerMember qsr:TimHortonsMember 2023-01-01 2023-12-31 0001618756 us-gaap:OperatingSegmentsMember us-gaap:ProductMember…
• YUMC (Yum China Holdings, Inc.)
• FY2025 10-K: …price and revenue is recognized when food or services are delivered or the benefits expire. In determining the relative standalone selling price of the benefits, the Company considers likelihood of future redemption based on historical redemption pattern and reviews such estimates periodically based upon the latest…
• FY2025 10-K: …to unlock additional opportunities for our core brands. As of December 31, 2025, approximately 17% of our restaurants were franchise restaurants. We are selective in granting franchises. We evaluate prospective franchisees based on financial strength, operational capability, and alignment with our corporate values…
• MCD (McDONALD’S CORPORATION)
• FY2025 10-K: …greater portion of future periods' earnings from foreign jurisdictions. The Company has significant operations outside the U.S. where it earns approximately 68% of its operating income. A significant portion of these historical earnings have been reinvested in foreign jurisdictions where the Company has made, and…
• FY2025 10-K: …with franchisees, the Company is able to further develop and refine operating standards, marketing concepts and product and pricing strategies. The Company's revenues consist of sales by Company-owned and operated restaurants and fees from franchised restaurants operated by conventional franchisees, developmental…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.