DPZ’s revenue increased 3.1% year-over-year to $997.99 million for its fiscal third quarter, ended September 12, 2021, and its net income came in at $120.40 million, up 21.5% year-over-year. However, its same-store sales fell for the first time in more than a decade. The stock is also trading at an expensive valuation. In terms of forward EV/S, DPZ’s 4.99x is 248.2% higher than the 1.43x industry average. In addition, the stock’s 3.97x forward P/S is 226.9% higher than the 1.22x industry average. So, it could be wise to wait for a better entry point in the stock.
Nevertheless, the rapid rate of vaccinations and an increase in consumer discretionary spending should drive the demand for pizza restaurants. According to a Business Wire research report, the global pizza market is expected to reach $233 billion in 2023. Therefore, instead of betting on DPZ, we think it could be wise to bet on better-positioned pizza stocks Yum! Brands, Inc. (YUM), Papa John’s International, Inc. (PZZA), and Rave Restaurant Group, Inc. (RAVE). They are well-positioned to capitalize on the industry tailwinds.