Domino’s Pizza Inc. (DPZ) topped Wall Street estimates once again. Even after breaking out to a new high, shares remain a good value.
Company Description
Domino’s Pizza has more than 9,000 locations world wide, generating almost $6 billion in annual revenues. The company is best known for its pizza but also offers chicken wings, sandwiches and more.
Another Surprise
On Mar 2 Domino’s Pizza announced quarterly results that showed same-store sales growth of almost 4%. The organic growth led to earnings of 30 cents per share, which was 5 cents ahead of expectations.
Efforts to rejuvenate the pizza chain’s image have lead to the fifth consecutive earnings surprise.
Analysts React
Following the release, the Zacks Consensus Estimate for 2010 is up 17 cents, to $1.10. Next year’s estimates are averaging $1.23, up 12 cents.
If these forecasts are met annual growth rates will be 26% and 12%, respectively.
Domino’s Pizza is the top rated restaurant stock. Also, despite a rapid price improvement, shares remain a good value. One share is running less than 13 times forward earnings.
The Chart
Shares of DPZ rallied into the earnings number and were subsequently caught in a range for a few weeks. However, on Apr 8 the stock broke out to set a new high. If you look at the MACD below, momentum could be shifting as we near a cross over.
Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service Zacks Investment Research
