As of May 22, 2025, Domino's Pizza Group PLC's estimated intrinsic value ranges from $180.27 to $493.73 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $493.73 | +84.2% |
| Discounted Cash Flow (5Y) | $404.31 | +50.9% |
| Dividend Discount Model (Multi-Stage) | $345.21 | +28.8% |
| Dividend Discount Model (Stable) | $201.50 | -24.8% |
| Earnings Power Value | $180.27 | -32.7% |
Is Domino's Pizza Group PLC (DOM.L) undervalued or overvalued?
With the current market price at $268.00, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Domino's Pizza Group PLC's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.62 | 0.74 |
| Cost of equity | 7.7% | 10.2% |
| Cost of debt | 4.0% | 7.1% |
| Tax rate | 17.4% | 18.2% |
| Debt/Equity ratio | 0.49 | 0.49 |
| After-tax WACC | 6.3% | 8.7% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $404 | $2,079M | 74.1% |
| 10-Year Growth | $494 | $2,426M | 55.6% |
| 5-Year EBITDA | $293 | $1,645M | 67.3% |
| 10-Year EBITDA | $396 | $2,045M | 47.3% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $88M |
| Discount Rate (WACC) | 8.7% - 6.3% |
| Enterprise Value | $1,009M - $1,410M |
| Net Debt | $510M |
| Equity Value | $499M - $900M |
| Outstanding Shares | 4M |
| Fair Value | $129 - $232 |
| Selected Fair Value | $180.27 |
| Metric | Value |
|---|---|
| Market Capitalization | $1040M |
| Enterprise Value | $1550M |
| Trailing P/E | 13.49 |
| Forward P/E | 9.02 |
| Trailing EV/EBITDA | 7.40 |
| Current Dividend Yield | 398.08% |
| Dividend Growth Rate (5Y) | -1.38% |
| Debt-to-Equity Ratio | 0.49 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $148.12 |
| Discounted Cash Flow (5Y) | 25% | $101.08 |
| Dividend Discount Model (Multi-Stage) | 20% | $69.04 |
| Dividend Discount Model (Stable) | 15% | $30.22 |
| Earnings Power Value | 10% | $18.03 |
| Weighted Average | 100% | $366.49 |
Based on our comprehensive valuation analysis, Domino's Pizza Group PLC's weighted average intrinsic value is $366.49, which is approximately 36.8% above the current market price of $268.00.
Key investment considerations:
Given these factors, we believe Domino's Pizza Group PLC is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.