Domino's Pizza, Inc. (DPZ): A Bull Case Theory

We came across a bullish thesis on Domino’s Pizza, Inc. on Investing with Martin’s Substack. In this article, we will summarize the bulls’ thesis on DPZ. Domino’s Pizza, Inc.'s share was trading at $419.63 as of November 28th. DPZ’s trailing and forward P/E were 24.53 and 21.51 respectively according to Yahoo Finance.

Domino's Pizza, Inc. operates as a pizza company in the United States and internationally. DPZ is demonstrating aggressive market positioning, increasingly outmaneuvering competitors in the commoditized U.S. pizza industry. Despite similarities in ingredient sourcing with rivals like Papa John’s and Pizza Hut, Domino’s has leveraged best-in-class franchisee economics, the largest advertising budget in QSR pizza, and a robust supply chain to drive growth. CEO Russell Wiener highlights confidence in achieving 3% same-store sales growth in 2026 and beyond while continuing to capture market share.

Promotions such as the ‘Best Deal Ever’—$9.99 for any large pizza with any toppings—have resonated with value-conscious consumers, boosting volume and supporting franchisee profitability. The strategy mirrors Walmart’s long-term approach of gaining share during economic downturns, and it is visibly effective as competitors like Pizza Hut struggle, prompting Yum Brands to initiate a strategic review of its underperforming brand.

Domino’s expansion onto delivery aggregators Uber Eats and Door Dash, while retaining full control over delivery and the ordering experience through its Pizza Tracker, further strengthens its competitive moat. CEO Wiener anticipates achieving similar market share on aggregators as in proprietary channels, a critical advantage in the growing delivery segment. Financially, Domino’s demonstrates exceptional efficiency, with a return on assets of 34% and return on invested capital of 85.6%, while cash flow per share has nearly tripled since 2017 due to consistent same-store sales growth, disciplined buybacks, and strategic store expansion.

Trading at a modest 20 PE and below in P/OCF, Domino’s offers defensive exposure with strong fundamentals, resilient earnings, and an attractive risk/reward profile. While meteoric stock price gains are unlikely, reaching $500 per share by end of 2026 appears plausible, with limited downside even in recessionary scenarios. The company’s operational excellence, value-driven strategy, and financial discipline make it a compelling long-term investment.

Previously we covered a bullish thesis on Domino’s Pizza, Inc. (DPZ) by Tired Salary Bear in April 2025, which highlighted the company’s franchise-driven model, strong unit economics, and consistent same-store sales growth. The company's stock price has depreciated approximately by 9.51% since our coverage. The thesis still stands as Domino’s continues to compound cash flows. Investing with Martin shares a similar but emphasizes aggressive market positioning and delivery expansion.

Domino’s Pizza, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held DPZ at the end of the second quarter which was 45 in the previous quarter. While we acknowledge the potential of DPZ as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.