💡 DPZ (Domino's Pizza) — Strong Buy: Q4 Earnings on Feb 23 Set to Reveal Consumer Resilience & Digital Moat Strength 🚀

SECTION 1 — Executive Summary 💼

Domino's Pizza remains the undisputed global leader in pizza delivery with unmatched digital ordering infrastructure and a proven franchise model that delivers consistent same-store growth even in choppy consumer environments. With Q4 results due Monday Feb 23 before the open, investors are positioned for a read on 2026 consumer spending trends and international acceleration that could re-rate the stock higher.

Overall rating: Strong Buy

12-month price target: $480 (blended 60% DCF + 40% comps multiple; methodology detailed in Valuation section)

Single biggest reason to own: Industry-leading digital platform (app + tracking) drives 70%+ of sales and creates sticky repeat revenue in a $220B+ global pizza TAM.

Single biggest risk: Rising commodity and labor costs squeezing franchisee margins if not offset by pricing power or efficiency gains.

SECTION 2 — Business Overview 🏢

Domino's Pizza is the world's largest pizza company by global retail sales, operating a network of approximately 21,000 stores in 90+ markets. It delivers pizza, wings, pasta, and desserts primarily through carryout and delivery.

Revenue breakdown (latest TTM as of Sep 2025):

- U.S. Company-owned stores & supply chain: ~55%

- U.S. franchise royalties & fees: ~25%

- International (franchise royalties + supply chain): ~20%

(Source: Yahoo Finance key statistics, Feb 19 2026 data)

Business model: 95%+ franchise-operated stores generate high-margin royalty income (typically 5.5% of sales) plus supply-chain distribution profits. Digital orders (via Domino's app and website) now represent the majority of sales, driving repeat business through loyalty programs and AI-powered personalization.

Competitive moat: Vertically integrated supply chain (dough, cheese, toppings produced in-house or controlled), proprietary ordering technology with real-time GPS tracking, and 65+ years of brand equity make replication extremely difficult for new entrants.

SECTION 3 — Financial Deep Dive 📈

Key metrics (TTM as of latest reported Q3 ended Sep 7 2025; source: Yahoo Finance & company filings, Feb 19 2026):

| Metric | TTM Value | YoY Growth |

|---------------------|---------------|------------|

| Revenue | $4.85B | +3.9% |

| Net Income | $589.5M | +3.1% |

| Diluted EPS | $17.24 | -2.6% (Q3 specific; full year 2024 was +13.7%) |

| Gross Margin | ~39.8% | Stable |

| Operating Margin | 19.25% | Stable |

| Net Profit Margin | 12.16% | Stable |

| Free Cash Flow | ~$631M | Positive |

Balance sheet health (mrq): Cash $295M, total debt/equity moderate for the sector, current ratio healthy.

Cash flow quality: Operating cash flow consistently exceeds net income (high quality; no major red flags).

Capital allocation: Consistent share buybacks + growing dividend (current yield ~1.3%); management prioritizes returning capital while funding international store growth.

SECTION 4 — Growth Analysis 🚀

Total addressable market (TAM): Global pizza market projected at ~$216B in 2026, growing to $340B+ by 2032 (CAGR ~4.5-5%; sources: Fortune Business Insights & Coherent Market Insights, Dec 2025/Feb 2026 reports). Delivery segment growing faster due to digital shift.

Current market share: Domino's holds the #1 position in U.S. pizza delivery (~17-20% share) and leads globally in store count and digital sales.

Key growth drivers next 3-5 years: International store expansion (targeting 4,000+ new stores in high-growth markets like India), continued digital innovation (AI personalization, loyalty), and menu innovation.

Management guidance vs. analyst consensus: Analysts expect Q4 EPS $5.36 (+YoY) and revenue $1.52B; management historically guides conservatively — analysts appear slightly more bullish on 2026 recovery.

Organic vs. acquisition: 100% organic growth (no major M&A).

SECTION 5 — Valuation 📊

DCF analysis [ASSUMPTION]: 5-year revenue CAGR 5%, EBIT margin expansion to 20.5%, WACC 8.5%, terminal growth 3% → implies fair value ~$475 (justified by historical 15-20% ROIC and digital scalability).

Comparable company analysis (as of Feb 19 2026):

| Peer | P/E (TTM) | EV/EBITDA | Growth Outlook |

|----------|-----------|-----------|----------------|

| MCD | 24x | 18x | Stable |

| YUM | 23x | 17x | Mid-single |

| QSR | 22x | 16x | Mid-single |

| DPZ | 22.4x | 18x | Mid-single |

Historical valuation range (5-year): P/E 20-30x; current 22.4x sits at lower end.

Bull / Base / Bear targets:

- Bull $550 (strong consumer + international beat; 35% upside)

- Base $480 (consensus growth; 19% upside)

- Bear $380 (macro slowdown; -6% downside)

Current price ~$404 (intraday Feb 19 2026 per TradingView data) vs. targets shows clear upside skew.

SECTION 6 — Risk Analysis ⚠️

1. Commodity/labor inflation (High prob, Medium impact): Trigger — rising cheese/wheat prices; watch monthly cost updates.

2. Consumer trade-down (Medium prob, High impact): Trigger — prolonged high interest rates; watch same-store sales.

3. Increased competition from aggregators (Medium prob, Medium impact): Trigger — DoorDash/Uber Eats gains; watch order mix.

4. Foreign currency volatility (Low-Medium prob, Medium impact): International exposure growing.

5. Regulatory (Low prob, Low-Medium impact): Minimum wage hikes in key states.

Short interest: Low (~2-3% of float; source: recent filings).

Insider activity: Net buying by executives in recent quarters.

Accounting quality: Clean; no red flags.

SECTION 7 — Catalyst Calendar 📅

- Next earnings: Feb 23 2026, BMO (Q4 FY2025)

- Product/strategic: Potential loyalty program enhancements or new menu items in H1 2026

- Macro events: Fed rate path & consumer spending data (impacts QSR traffic)

- 12-month timeline: International store openings (monthly), Q1 earnings May 2026, potential capital return updates.

SECTION 8 — Relevant Data & Charts 📊

Why it matters: Clear long-term revenue compounding with stable margins — underpins the growth thesis heading into earnings. (Source: Simply Wall St analysis, 2025 data)

Why it matters: North America still dominates pizza demand — Domino's U.S. leadership position drives the majority of near-term earnings power.

Why it matters: Global pizza market projected to expand steadily through 2033 — validates Domino's international runway.

SECTION 9 — Technical Analysis 📈

Primary Chart: Daily timeframe, 1-year view (as of Feb 19 2026).

- Price action hugging 200-day MA after pullback from 2025 highs; testing key support ~$390-400 zone.

- RSI (14) neutral ~45 (room to run); MACD showing early bullish crossover.

- Volume profile: Highest volume node near $420 — potential magnet on positive earnings reaction.

- Visible setup: Inverse head-and-shoulders forming; breakout above $420 resistance would target $460-480 quickly.

Technical implication: Earnings beat + positive guidance could spark 10-15% move higher in days.

SECTION 10 — The Verdict 🏆

Bull case ($550, 35% prob): Consumer holds up + international acceleration + margin beat → 2026 guidance raised.

Base case ($480, 50% prob): In-line print with steady 4-5% comps; most likely scenario.

Bear case ($380, 15% prob): Weak guidance on macro fears triggers sell-off.

Expected value: (0.35×550) + (0.50×480) + (0.15×380) = $492 (22% upside from ~$404).

Final recommendation: Strong Buy with High conviction.

30-second elevator pitch: "DPZ is the highest-quality QSR name with the best digital flywheel in the industry — earnings Monday likely confirms 2026 is back on track for mid-single-digit growth and expanding returns to shareholders."

Sources

- Yahoo Finance DPZ key statistics & financials (Feb 19 2026)

- EarningsWhispers & Finviz earnings calendar (Feb 19 2026)

- Fortune Business Insights / Coherent Market Insights pizza TAM reports (2025-2026)

- TradingView DPZ daily chart (Feb 19 2026)

- Analyst consensus: Public.com, Zacks, Benzinga, TickerNerd (Feb 2026 data)

- Company filings & Simply Wall St (Q3 2025 TTM data)

What are your thoughts on DPZ? Drop them below 👇