Shares of Domino's Pizza (DPZ +0.21%) traded as high as $533 in 2024, but they currently sit around $405. This stock has been a phenomenal performer over the last 15 years. A $1,000 investment at the end of 2010 would be worth more than $25,000 today.
Should investors take advantage of the dip to start a position in the world's largest pizza company? Domino's business performance and valuation could make a return to $500 a real possibility in the next year or so.
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Consistent winning
There's no shortage of options when you want to buy pizza, but Domino's is one of the most widespread brands in the fast food market. It has more than 22,100 stores in 90 countries, with a 23% share of the U.S. quick-service market.
There are many businesses where having too many stores can lead to cannibalization of sales, higher costs, and pressure on profitability. But Domino's has brilliantly used its large store footprint to put locations in proximity to as many people as possible, allowing it to dominate the market. Roughly half of Domino's U.S. market share was gained in the last 11 years, and it gained another point of market share in the U.S. last year, with same-store sales up 3%.
Management expects its momentum to continue. The company continues to open more stores, but it also should benefit from growth in carryout sales, more customers signing up for the rewards program (now over 37 million active users), and menu adjustments.
NASDAQ: DPZ
Key Data Points
The simple math to $500
Analysts expect earnings per share to reach $19.83 in 2026 and increase to $21.53 in 2027. The stock currently trades at a forward price-to-earnings (P/E) multiple of 20 -- below its 25.9 three-year average. If it returns to a forward P/E of 25 (where it was trading a year ago) on 2026 estimates, the stock price would hit $495.
If, at this time next year, the stock is trading at a 25 forward P/E on 2027 estimates, the stock would trade at $538. Keep in mind, analysts have been raising their estimates recently, so the company appears on track to meet or beat the current consensus estimate.
However, some headwinds could cause the company to miss earnings estimates. Management noted higher insurance costs for company-operated stores in 2025. It also expects higher food costs and lower supply chain productivity gains than in recent years.
These are minor problems that should be baked into earnings expectations. Overall, barring a recession, weaker consumer spending, or any other executional missteps by management that would cause the company to miss earnings estimates, the stock has a favorable chance of rebounding toward $500 over the next year.
