Domino's Pizza, Inc. (DPZ) Intrinsic Value & DCF Valuation
Restaurants · NASDAQ
Current Price
$341.85
Intrinsic Value
$385.31
+11.3% margin of safety
What Is Domino's Pizza, Inc.'s Intrinsic Value?
As of 2026-08-21, the base-case DCF model estimates the intrinsic value of Domino's Pizza, Inc. (DPZ) at $385.31 per share, compared with a market price of $341.85, a margin of safety of +11.3%. The base case assumes 6.8% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $307.36 to $475.15. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Domino's Pizza, Inc. (DPZ) Undervalued?
At $341.85, DPZ trades about 11.3% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Global Franchise Network Scale
Domino's operates a vast international franchise network, enabling rapid expansion and efficient market penetration. This scale provides significant operational leverage and brand recognition.
↑Technology and Delivery Infrastructure
The company has invested heavily in its digital ordering platforms and delivery logistics. This sophisticated infrastructure creates a seamless customer experience and operational efficiency.
↑Brand Recognition and Consumer Habits
Domino's enjoys strong brand loyalty and has ingrained itself into consumer habits for convenient pizza ordering. This established presence makes it a go-to choice for many.
INVESTMENT RISKS
↓Labor and Ingredient Cost Volatility
Rising labor wages and fluctuating ingredient costs can significantly impact profitability, especially for a franchise-heavy model. Managing these pressures across numerous franchisees is complex.
↓Dependence on Franchisee Performance
Domino's relies heavily on its franchisees for operational execution and brand representation. Underperforming franchisees can negatively affect the overall brand and financial results.
↓Evolving Food Technology and Trends
The food industry is subject to rapid changes in consumer tastes and dietary trends. Failure to adapt to new preferences or emerging food technologies could lead to market share erosion.
Base case
DPZ base case valuation
Intrinsic Value
$385.31
Margin of safety
+11.3%
Expected annual return
+2.4%
Base case assumptions: 6.8% annual growth, 10.0% discount rate, 17.31x exit multiple, 5 year projection. Data as of 2026-08-21.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the DPZ valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Domino's Pizza, Inc. respond.
Open DCF Calculator for DPZCompany Overview
Domino's Pizza, Inc. operates as a leading international and domestic purveyor of pizza, managing its extensive operations through three distinct segments: U.S. Stores, International Franchise, and Supply Chain. The company is primarily recognized for its Domino's-branded pizzas, which are distributed via a vast network of both corporate-owned and independently franchised outlets. Beyond its flagship product, the menu also encompasses a variety of other offerings, including oven-baked sandwiches, pasta dishes, boneless and winged chicken, various bread and dip accompaniments, desserts, and soft drink beverages. As of January 2, 2022, the enterprise boasted approximately 18,800 locations spanning 90 global markets. Established in 1960, Domino's Pizza, Inc. is headquartered in Ann Arbor, Michigan.
Financial Metrics — DPZ Stock Valuation Data
Revenue/Share (TTM)
$150.90
FCF/Share (TTM)
$19.61
ROIC (TTM)
62.3%
ROE (TTM)
-15.1%
P/FCF
17.3x
EV/EBITDA
16.4x
FCF Yield
5.78%
Debt/Equity
n/m
Based on trailing twelve-month data, DPZ shows a free cash flow per share of $19.61 and a ROIC of 62.3%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 17.3x and FCF yield of 5.78% are important context metrics when evaluating DPZ's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of DPZ?
Domino's Pizza, Inc. currently generates $19.61 in free cash flow per share. At the current price of $341.85, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is DPZ undervalued?
DPZ trades at a P/FCF ratio of 17.3x with a free cash flow yield of 5.78%. This P/FCF is in a moderate range. However, whether DPZ is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value DPZ stock using DCF?
To perform a DCF valuation on Domino's Pizza, Inc.: (1) Start with the trailing free cash flow per share ($19.61) as the base, (2) project future FCF growth over 5-10 years based on Restaurants industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting DPZ's risk profile — with a debt-to-equity of -1.29x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to DPZ?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Domino's Pizza, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Restaurants trends, then discounting those amounts to today's dollars. DPZ's ROIC of 62.3% reflects how efficiently the company converts invested capital into profit.
How does WACC affect DPZ stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For DPZ, with a debt-to-equity ratio of -1.29x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 16.4x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See DPZ PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Consumer Cyclical valuationsDCF and P/E value DPZ with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-08-21. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.