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Barchart
Barchart
Mark R. Hake, CFA

Domino's Pizza Expands Its Free Cash Flow Margins - DPZ Stock is Worth 25% More

Domino's Pizza (DPZ) reported strong Q3 revenue growth on Oct. 10 and expanded free cash flow (FCF) margins. However, management lowered its revenue growth guidance. As a result, DPZ stock looks at least 25% undervalued here at $537 per share. One way to play this is to short out-of-the-money put options.

DPZ closed at $429.67, up over 5% for the day. However, the stock is still well off of its highs seen last quarter. On June 18, DPZ peaked at $533.64. So, in the past four months, DPZ has dropped $103.97, or -19.5%.

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