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Domino's Pizza Inc. (DPZ) generated strong free cash flow (FCF) during Q3, and its FCF margins held up. DPZ stock still looks undervalued, and its target price is 19% higher at $498 per share. Shorting out-of-the-money puts and buying in-the-money calls are good ways to play this.
DPZ is at $418.39 in morning trading on Friday, Oct. 17. This is near its recent lows before its Oct. 14 release of Q3 earnings results.