Based on the aggregated intelligence of 150,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, pizza delivery company Domino's Pizza (NYSE: DPZ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Domino's business and see what CAPS investors are saying about the stock right now.

Domino's facts

Headquarters (Founded)

Ann Arbor, Mich. (1960)

Market Cap

$730 million



Trailing-12-Month Revenue

$1.37 billion


Chairman/CEO David Brandon (since 1999)
CFO Wendy Beck (since 2008)

Compound Annual Revenue and Net Income Growth (Over Past 3 Years)

(2.1%) and (16.5%)

1-Year Return


Cash / Debt

$49 million / $1.6 billion


Papa John's International (Nasdaq: PZZA)
Yum! Brands (NYSE: YUM)
CKE Restaurants (NYSE: CKR)

Other Restaurant Stock Alternatives

McDonald's (NYSE: MCD)
Chipotle Mexican Grill (NYSE: CMG)
Buffalo Wild Wings (Nasdaq: BWLD)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 28% of the 283 members who have rated Domino's believe the stock will underperform the S&P 500 going forward. These bears include Rumblinfred and All-Star jed71.

In January, Rumblinfred highlighted Domino's as a great bet to fall:

[T]heir balance sheet is a mess and the stock has a negative book value of $23 share. ... I think all these pizza franchises face higher commodity prices which means lower margins if they are unable to raise prices in the face of a severe recession and improved frozen competition.

In a pitch from the same day, jed71 expands on why Domino's just doesn't deliver:

[T]heir product may be improving, yes, but the financials, especially the balance sheet, have a long ways to go. ...

As interest rates begin to creep up, the bond market will begin demanding higher yields, and banks will continue to tighten commercial lending standards. It will become increasingly difficult for a company, such as [Domino's], to borrow money. ... In my opinion, they are worth absolutely nothing to the shareholders today (and the balance sheet supports that assessment).

In addition, it seems every restaurant in the country is competing for a piece of the shrinking U.S. "casual dining" market. This increased competition is going to pressure all participants margins over the near term. Stay away at all costs.

What do you think about Domino's, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Chipotle and Buffalo Wild Wings are Motley Fool Hidden Gems picks. Chipotle is also a Rule Breakers recommendation, and the Fool owns shares of it. The Fool's disclosure policy always gets a perfect score.