Value
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.1 |
| P/S | 8.9 |
| EV/EBITDA | 3.0 |
| Fwd P/E | 8.0 |
| PEG | 5.1 |
| Analyst target | 7.5 |
- ▸Forward P/E: 14.9x
- ▸PEG: 1.48
DPZ · Why this verdict
Why Domino's Pizza (DPZ) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company faces material concentration risk from a single U.S. pizza cheese supplier and a dominant beverage supply arrangement — both classified as high-risk in regulatory filings — creating supply chain fragility that could disrupt operations or compress margins if either relationship were disrupted. Bear case | The company announces sourcing diversification that reduces single-supplier cheese dependence meaningfully over the next 12 months. | →Stable |
| CounterLong-standing single-supplier relationships in the restaurant industry can reflect negotiated cost advantages rather than vulnerability; if the relationships are stable and contractually protected, the concentration may represent cost discipline rather than a risk that is likely to materialize. | ||
Three of the last four quarters resulted in earnings misses — with the two most recent quarters both falling short of estimates — indicating that execution has been inconsistent and analyst confidence in forward guidance reliability is under pressure. Earnings | Earnings per share beats estimates in the next two consecutive quarters, confirming that recent misses reflected temporary factors rather than structural guidance deterioration. | →Stable |
| CounterThe single beat in the last four quarters was a 3% positive surprise; if the underlying cost or demand environment has genuinely become harder to forecast, estimates may continue to lag and the miss pattern could persist beyond current market expectations. | ||
A confirmed death cross, declining on-balance volume, and a long-term moving average slope falling at approximately 5% per month indicate that the stock is in a confirmed technical downtrend — a pattern that typically requires a meaningful fundamental catalyst to reverse. Momentum breakdown | The stock reclaims and sustains above its 200-day moving average within 8 weeks, resolving the death cross into a technical recovery. | →Stable |
| CounterThe death cross formed while MACD has been improving and RSI sits near 59 — readings more consistent with a recovery setup than a deteriorating trend; if the next earnings report delivers a beat, any technical resolution could be swift and the death cross could prove a false signal. | ||
Short interest of 12% of float creates meaningful overhang on the stock price, as short sellers have largely been correct during the recent earnings miss period and may add further pressure if fundamentals continue to disappoint. Risk breakdown | Short interest falls below 7% of float within six months as the earnings miss pattern reverses and bearish positioning unwinds. | →Stable |
| CounterElevated short interest at 12% simultaneously sets the stage for a sharp short squeeze if the company delivers a positive earnings surprise; the large short base could amplify any upside move materially. | ||
The company faces material concentration risk from a single U.S. pizza cheese supplier and a dominant beverage supply arrangement — both classified as high-risk in regulatory filings — creating supply chain fragility that could disrupt operations or compress margins if either relationship were disrupted.
→StableBear case
- Expectation
- The company announces sourcing diversification that reduces single-supplier cheese dependence meaningfully over the next 12 months.
CounterLong-standing single-supplier relationships in the restaurant industry can reflect negotiated cost advantages rather than vulnerability; if the relationships are stable and contractually protected, the concentration may represent cost discipline rather than a risk that is likely to materialize.
Three of the last four quarters resulted in earnings misses — with the two most recent quarters both falling short of estimates — indicating that execution has been inconsistent and analyst confidence in forward guidance reliability is under pressure.
→StableEarnings
- Expectation
- Earnings per share beats estimates in the next two consecutive quarters, confirming that recent misses reflected temporary factors rather than structural guidance deterioration.
CounterThe single beat in the last four quarters was a 3% positive surprise; if the underlying cost or demand environment has genuinely become harder to forecast, estimates may continue to lag and the miss pattern could persist beyond current market expectations.
A confirmed death cross, declining on-balance volume, and a long-term moving average slope falling at approximately 5% per month indicate that the stock is in a confirmed technical downtrend — a pattern that typically requires a meaningful fundamental catalyst to reverse.
→StableMomentum breakdown
- Expectation
- The stock reclaims and sustains above its 200-day moving average within 8 weeks, resolving the death cross into a technical recovery.
CounterThe death cross formed while MACD has been improving and RSI sits near 59 — readings more consistent with a recovery setup than a deteriorating trend; if the next earnings report delivers a beat, any technical resolution could be swift and the death cross could prove a false signal.
Short interest of 12% of float creates meaningful overhang on the stock price, as short sellers have largely been correct during the recent earnings miss period and may add further pressure if fundamentals continue to disappoint.
→StableRisk breakdown
- Expectation
- Short interest falls below 7% of float within six months as the earnings miss pattern reverses and bearish positioning unwinds.
CounterElevated short interest at 12% simultaneously sets the stage for a sharp short squeeze if the company delivers a positive earnings surprise; the large short base could amplify any upside move materially.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Domino's Pizza has missed earnings estimates in three of the last four quarters and confirmed a technical death cross, while carrying material supply concentration risk from a single domestic cheese supplier; the 15% gap to analyst consensus and a recovery-stage technical pattern suggest a rebound is possible if execution stabilizes, but the burden of proof sits firmly with management.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 10.0 |
| Gross margin | 1.7 |
| Op margin | 7.7 |
| Net margin | 5.9 |
| Current ratio | 5.8 |
| FCF quality | 6.4 |
| Moat | 4.4 |
| Piotroski F | 6.7 |
- ▸No competitive moat
Growth
2.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.4 |
| EPS growth | 1.1 |
Momentum
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 2.1 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -5.2%/30d — confirmed downtrend
Sentiment
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 8.4 |
| erm sentiment | 4.6 |
- ▸Analyst upside: 28%
Insider
5.1/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.2 |
- ▸Negligible insider selling — $466,807 (0.005% of mkt cap)
Peer rank
5.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.8 |
| quality rank | 8.1 |
| growth rank | 3.1 |
- ▸Best-in-class margins
Technical
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.7 |
| support resistance | 3.4 |
| 52w position | 2.8 |
| gap | 5.0 |
Risk (lower is worse)
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 2.7 |
| days to cover | 4.6 |
| volatility | 4.0 |
| put call | 4.4 |
| implied vol | 4.8 |
| beta | 7.2 |
- ▸Concentration risks: 3 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 1.9 |
| dividend safety | 6.5 |
- ▸Earnings concerns: 1B/3M
- ▸Dividend: 255.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.1>=5.5
- ASYMMETRY:1.6>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:17d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- DEATH_CROSS:momentum=6.1>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.60
Upside
+15.3%
Downside
9.5%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 51
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.0) was not enough to lift the adjusted overall above the threshold. Current asymmetry R:R is 1.60 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.0, Value at 6.7, and Quality at 6.1; the weakest are Growth at 2.2, Catalyst at 3.7, and Technical at 3.7. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 1.60 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Miss Streak
Trip ifEPS surprise exceeds 0% for 2 consecutive quarters.
- P2Supply Chain Concentration Risk
Trip ifCompany discloses a second domestic cheese supplier, reducing single-supplier concentration below 50% of domestic cheese supply.
- P3Death Cross Technical Downtrend
Trip ifStock closes above its 200-day moving average for 4 consecutive weeks.
- P4Short Interest Overhang
Trip ifShort interest falls below 6% of float for 2 consecutive measurement periods.