June 15, 2023
Top 10 Stock Domino's Pizza Group Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Domino's Pizza Group – Top 10 Stock in FTSE 350 Index
Domino's Pizza Group is listed as a top 10 stock on June 15, 2023 in the market index FTSE 350 because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 45 (45% performer), Obermatt assesses an overall hold recommendation for Domino's Pizza Group on June 15, 2023.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Restaurants |
| Index | FTSE All Shares, FTSE 250, FTSE 350 |
| Size class | Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Domino's Pizza Group Hold
| 360 METRICS | June 15, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 91 |
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| GROWTH | ||||||||
| GROWTH | 9 |
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| SAFETY | ||||||||
| SAFETY | 37 |
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| SENTIMENT | ||||||||
| SENTIMENT | 65 |
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| 360° VIEW | ||||||||
| 360° VIEW | 45 |
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ANALYSIS: With an Obermatt 360° View of 45 (better than 45% compared with alternatives), overall professional sentiment and financial characteristics for the stock Domino's Pizza Group are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Domino's Pizza Group. The consolidated Value Rank has an attractive rank of 91, which means that the share price of Domino's Pizza Group is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 91% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 65, which means that professional investors are more optimistic about the stock than for 65% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 9, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 37, meaning the company has a riskier financing structure than 63 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a 360° View of 45, Domino's Pizza Group is worse than 55% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 91) and positive market sentiment in the professional investor community (Sentiment Rank of 65), but growth expectations are below-average (Growth Rank of 9) and the financing structure is on the risky side(Safety Rank of 37). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (high sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Domino's Pizza Group is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Domino's Pizza Group positive
ANALYSIS: With an Obermatt Sentiment Rank of 65 (better than 65% compared with alternatives), overall professional sentiment and engagement for the stock Domino's Pizza Group is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Domino's Pizza Group. Analyst Opinions are at a rank of 21 (worse than 79% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 57, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Domino's Pizza Group. Even better, the Professional Investors rank is 98, meaning that professional investors hold more stock in this company than in 98% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 75, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 75% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 65 (more positive than 65% compared with investment alternatives), Domino's Pizza Group has a reputation among professional investors that is above-average compared with that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Domino's Pizza Group Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 91 (better than 91% compared with alternatives) for 2023, Domino's Pizza Group shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Domino's Pizza Group. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 64 which means that the stock price compared with what market professionals expect for future profits is lower than for 64% of comparable companies, indicating a good value concerning Domino's Pizza Group's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 100, and for Dividend Yield with a Dividend Yield Rank of 80. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 67% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 33). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 91, is a strong buy recommendation based on Domino's Pizza Group's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Domino's Pizza Group has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Domino's Pizza Group shares. ...read more
Growth Strategy: Domino's Pizza Group Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 9 (better than 9% compared with alternatives), Domino's Pizza Group shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for Domino's Pizza Group. Sales Growth has a rank of 40, which means that currently professionals expect the company to grow less than 60% of its competitors. The same is valid for Profit Growth, with a rank of 23, and Capital Growth with 24. In addition, Stock Returns have a below market rank of 31, which means that the stock returns have recently been below 69% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 9, is a SELL recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: Domino's Pizza Group Debt Financing Safety below-average
| SAFETY METRICS | June 15, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 2 |
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| REFINANCING | ||||||||
| REFINANCING | 59 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 61 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 37 |
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ANALYSIS: With an Obermatt Safety Rank of 37 (better than 37% compared with alternatives), the company Domino's Pizza Group has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Domino's Pizza Group is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Domino's Pizza Group. Refinancing is at 59, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 59% of its competitors. Liquidity is also good at 61, meaning the company generates more profit to service its debt than 61% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 2, which means the company has an above-average debt-to-equity ratio. It has more debt than 98% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 37 (worse than 63% compared with alternatives), Domino's Pizza Group has a financing structure that is riskier than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Domino's Pizza Group could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Domino's Pizza Group Below-Average Financial Performance
| COMBINED PERFORMANCE | June 15, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 91 |
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| GROWTH | ||||||||
| GROWTH | 9 |
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| SAFETY | ||||||||
| SAFETY | 61 |
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| COMBINED | ||||||||
| COMBINED | 32 |
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ANALYSIS: With an Obermatt Combined Rank of 32 (worse than 68% compared with investment alternatives), Domino's Pizza Group (Restaurants, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Domino's Pizza Group are a good value (attractively priced) with a consolidated Obermatt Value Rank of 91 (better than 91% of alternatives) but show below-average growth (Growth Rank of 9), and are riskily financed (Safety Rank of 37), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 32, is a hold recommendation based on Domino's Pizza Group's financial characteristics. As the company Domino's Pizza Group's key financial metrics exhibit good value (Obermatt Value Rank of 91) but low growth (Obermatt Growth Rank of 9) and risky financing practices (Obermatt Safety Rank of 37), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 91% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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