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On Monday, TD Cowen analyst Andrew M. Charles reaffirmed a Buy rating for Domino’s Pizza (NASDAQ:DPZ) stock, along with a steady price target of $490.00. Currently trading at $455.64, the stock sits between analyst targets ranging from $402 to $559, with consensus showing 14% potential upside. According to InvestingPro data, the company maintains strong financial health with an overall score of "GOOD." Charles highlighted the company’s guidance for under 3% U.S. comparable sales in the first half of 2025 and the extension of its exclusive partnership with Uber (NYSE:UBER) Eats. Despite not announcing the launch of a Stuffed Crust pizza, the analyst believes the positive outlook for Domino’s stock remains intact, as the company’s strategic focus for 2025 has not shifted. The company’s recent performance supports this outlook, with revenue growing 4.41% over the last twelve months to $4.67 billion, and a healthy gross profit margin of 28.47%.
Charles adjusted the earnings per share estimates for 2025-26 but chose to maintain the $490 price target. In response to queries from investors, Charles anticipates a normalized 2.5% sales increase from the integration of DoorDash (NASDAQ:DASH) services. This forecast is based on multiplying Uber’s 3% sales mix by 2.6, reflecting DoorDash’s larger market share according to Second Measure data. Furthermore, TD Cowen Internet Analyst John Blackledge’s proprietary survey data indicates that Uber and DoorDash users are mostly incremental, which supports the potential sales lift.
Domino’s management has outlined plans for two new menu innovations in 2025, but has not confirmed whether this will include the much-anticipated Stuffed Crust pizza. Management has previously expressed a preference for a mix of one pizza and one non-pizza item each year, similar to the cadence seen in 2024. While some investors are hopeful for a Stuffed Crust release in the first quarter of 2025, Charles notes that it is common for pizza companies to withhold details on menu and marketing strategies due to the highly competitive nature of the industry.
The analyst also mentioned that proprietary survey data shows Domino’s has been successful in enhancing its value perception among consumers since August’s market slump. The brand is reportedly widening its lead in value perceptions when compared to its quick-service restaurant peers, a trend that aligns with Domino’s long-standing emphasis on value. InvestingPro analysis reveals the company has maintained dividend payments for 13 consecutive years, with a current yield of 1.31%. For deeper insights into DPZ’s valuation and growth prospects, including 8 additional ProTips and comprehensive financial metrics, check out the full Pro Research Report available on InvestingPro.
In other recent news, Domino’s Pizza reported its fourth-quarter earnings for 2024, which fell short of analyst expectations. The company posted an earnings per share (EPS) of $4.89, slightly below the forecasted $4.96, and reported revenue of $1.44 billion, missing the anticipated $1.49 billion. Despite these setbacks, Domino’s achieved a 4.4% growth in global retail sales and an 8% increase in operating income for the quarter. Meanwhile, Domino’s partnership with Uber Eats contributed approximately 2.7% to its total revenue in the fourth quarter.
In other developments, Domino’s has extended its exclusive partnership with Uber Eats until May 1st, with plans to explore additional third-party food aggregators, potentially adding $1 billion in revenue. Analysts at Truist Securities have maintained a Buy rating on DoorDash, with a price target of $235, and speculate a possible partnership between DoorDash and Domino’s in the second half of 2025. Additionally, Domino’s has increased its dividend by 15% and repurchased 259,000 shares for $112 million. The company is focusing on expanding its presence on third-party delivery platforms and expects to open over 175 new stores in the U.S. in 2025.
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