The Domino's Pizza story

What drives the business

• Domino's operates a franchise model with limited company investment in stores, with approximately 99% of global locations independently owned as of December 2025 and standard U.S. franchise agreements generally charging a 5.5% royalty on sales.
• Its supply chain business makes dough and distributes ingredients primarily in the U.S. and Canada, generating $2.99 billion, or 60.5% of consolidated revenue, in 2025, compared with $1.61 billion from U.S. stores and $338.7 million from international franchising.
• The largest franchisee, Domino's Pizza Enterprises, operated 3,524 stores across 12 international markets as of December 2025, representing 16% of global stores but 1.4% of consolidated revenue in 2025.
• Multinational agreements with Uber Technologies and DoorDash extend ordering access through their marketplaces, while more than 85% of U.S. retail sales came through digital channels in 2025.
• Store openings and sales at existing locations feed royalties and supply chain demand, with 26 net U.S. openings and 183 internationally bringing the network to 22,531 stores in the quarter to June 2026.

What the price assumes

At $292.27 per share, the reverse DCF implies free cash flow after stock pay grows 4.6% annually for ten years, using a 10.2% discount rate.

Domino's delivered 13.2% annual growth in that measure over the last 10 years, while the TenQ check sets an 8.6% bar by slowing that record halfway toward 4%.

The implied growth rate is below both benchmarks, although revenue growth averaged 2.9% annually over the last three years and free cash flow declined in the first two fiscal quarters of 2026.

Value DPZ on your own assumptions

What could change the story

• Nearly flat same store sales leave expansion doing much of the work, making growth dependent on franchisees continuing to open locations and sustain demand.
• Total debt of $4.9 billion compares with $165 million of cash and short-term investments, and negative equity causes Domino's to fail TenQ's equity-based financial checks.
• Interest coverage of 4.96 falls just short of TenQ's 5.00 threshold, while shareholder distributions absorbing 97.0% of cash flow leave little room within that cash flow for other uses.
• Free cash flow fell to $313.6 million in the first two fiscal quarters of 2026 from $331.7 million in the comparable period, reflecting operating asset and liability changes and advertising payment timing.
• Dependence on a single U.S. pizza cheese supplier and a single supplier for most U.S. meat toppings creates exposure to supply disruptions, even though Domino's identifies alternative suppliers.

What to watch next

• The July 2026 release included no numerical guidance, leaving U.S. and international same store sales and net openings as the clearest measures of whether order growth is strengthening the business.
• Supply chain results will show whether procurement gains can sustain the 12.0% gross margin achieved in the quarter to June 2026 as food basket costs rise.
• Cash flow releases will show whether the advertising and working capital pressures ease, and whether shareholder distributions consume less of the cash generated.
• Domino's announced Joe Jordan's appointment as chief executive effective October 1, 2026, making the next releases an opportunity to assess continuity in its store expansion and ordering strategy.

Sources

• Domino's Pizza's earnings release, filed with the SEC
• Its latest 10-Q or 10-K, for the risk factors
• The DPZ stock report, for every figure and check