NI
NiSource Inc.
stock NYSE

This is a simple valuation of Domino's PIzza inc ($DPZ).
After i read [this compelling article](https://www.reddit.com/r/ValueInvesting/s/AIFxbuD8oi) over the weekend, i decided to take a look at DPZ. The following format is consistent across all my "simple valuation". I will give my conclusions and comments below. **Disclosure**: i don't own the stock.
**TLDR**: DPZ is cheap. It is priced as if the company can only grow EPS by no more than 3% a year moving ahead, even though it has been growing at almost 17% a year for the last 10 years and analysts are forecasting 10-11% a year for the next 5 years.
0 Domino's Pizza, DPZ. FY End: Dec This report: Q1-FY2026 Today: 29th June 2026
1 SP: $298USD, Market Cap: $9.92B, Annual Revenue: $4.98Bn
2 TTM EPS (diluted): 17.37, (Normalised): 17.89, (Zack's): 17.37 (SA): 17.37. Hence i will use 17.37 as the TTM EPS & Normalised EPS. I will ignore the 17.89 from Morningstar.
3 Yield TTM (Dividend): 2.50, (5YrAverage): 1.17, (Buy Back Yield): 3.86%, (5YrAverage): 2.51%
4 ROA. ROE, ROIC: 31.8%, - , -
5 P/E (Diluted and Normalised) = 17.15, (5 year average): 26.6. P/E (Fwd): 15.47
6 Debt / Equity: - Net Debt / EBITDA = (5135.7 - 232.9) / 1030 = 4.86
7 FCF Conversion: FCF/NI = 96.9% to 98% over average 5 and 10 years.
**8 Stated Growth (past):**
|Periods CAGR%|Qtr / YOY|1yr|3yrs|5yrs|10yrs|
|:-|:-|:-|:-|:-|:-|
|Revenue|3.47|4.96|2.88|3.71|8.34|
|Net Income|\-6.58|3|9.98|4.14|12.05|
|EPS|\-4.62|5.37|11.93|7.24|17.61|
**9 Manually calculated growth (past):**
Pre-covid (2016 to 2019): (9.61/4.32)\^(1/3) -1 = 30.5%
Post-Covid ( 2022 to 2025): (17.58/12.11)\^(1/3) -1 = 13.22%
Whole period (17.58/4.32)\^(1/9) -1 = 16.87%
**10 Management Guidance**
2026 SSS USA "up to low single digit" (Q1 call), previously "3%" (Q4 call)
2026 SSS International "low single digits" (Q1 call), previously "1% to 2%" (Q4 call)
2026 expect 175+ net stores in USA and 800 net stores internationally
**11 Analyst Estimates for next 3 to 5 years EPS growth CAGR**
a SA dot com: stated growth: 11.28%, manually calculated 5yrs : 9.7%, 10yrs: 10%
b Zacks' 11.30% next 5 years CAGR
c DCF dot com, manually calculated next 5 years CAGR: 9.8%
**12 My estimates for fairvalue**
|Scenario|Year 1 to 5 Growth|Year 6 to 10 Growth|Terminal Growth|Multiplier|Fair Value|
|:-|:-|:-|:-|:-|:-|
|A|9%|5%|3%|23.72x|412|
|B|9%|\-|3%|22.17x|385|
|C|5%|5%|3%|20x|347|
|D|5%|\- |3%|18.72x|325|
|E|\-|\-|3%|17x|297|

The "-" does not denote no-growth, but merely no abnormal growth, just terminal growth of 3%. Discount is 9% and Terminal Growth is 3%
13 **Morningstar fairvalue** for DPZ is $412. And **CFRA fairvalue** for DPZ is 277.47
**14 My Notes:**
a. Log Linear Regression shows that from 2000 to 2025 (excluding the one time structure change in 2003), the continous earnings growth is around 16-18% a year, and the consistency is around 88%, In the last 10 years, manually computed CAGR and Stated past growth rates has been around 16-17%. However, analysts are only forecasting 10-11% a year for the next 5 years. And the market is only estimating earnings growth at 3% (last SP is around 298 versus scenario E of 297). Is it mispriced? it sure seems so, especially since buy back was around 4% (3.86%) in the past 12 months and the past 5 years average buy-back yield was around 2.51%
b. So what is the fair value ? I don't really know but i am of the opinion that is probably Scenario B or C and buying at Scenrio E at the current price isn't a bad proposition.
**15 A word about the Debt Level and next steps**
This is a very unique business, and due to its franchise model. it is asset light. The other thing is that this company is very consistent with generating free cash flow (see point 7). The two red flags **high debt level** and **negative equity** is related, and it isn't a really red flag: the company borrows money using its franchise agreements and royalties as collateral. And it uses the borrowed money to pay off old debts and engage in sharebuy back. The management has a 4-6x target. This past Q1, they noted that the net debt/ebitda fell from 4.6 to 4.3 and hence it received board authorisation to buy back more shares (and increase debt). Like MCD and Starbucks, buying back too much shares will eventually result in negative equity.
If i were to proceed with further due diligence, i would want to do a pre-mortem on what scenario would i need to watch out for that could be dangerous for this share buy-back with debt exercise. Would a slow down be a problem with cash flow or would it just stop the buy backs ?
I know that they had no problems in 2020 during the pandemic, restaurants failed but DPZ thrived due to its fleet of delivery riders. During the 2008 financial crisis, while the USA business performance slowed down with a -5% SSS in 2008, the international segment grew and tightly managed capex insulated corporate cash flows. Would the international business today still cushion the company should the USA business slow down (which it is at the moment) ?
These questions i would want to investigate further if i intend to buy the stock. (out of scope for this simple Valuation)

This is a simple valuation of Domino's PIzza inc ($DPZ).
After i read [this compelling article](https://www.reddit.com/r/ValueInvesting/s/AIFxbuD8oi) over the weekend, i decided to take a look at DPZ. The following format is consistent across all my "simple valuation". I will give my conclusions and comments below. **Disclosure**: i don't own the stock.
**TLDR**: DPZ is cheap. It is priced as if the company can only grow EPS by no more than 3% a year moving ahead, even though it has been growing at almost 17% a year for the last 10 years and analysts are forecasting 10-11% a year for the next 5 years.
0 Domino's Pizza, DPZ. FY End: Dec This report: Q1-FY2026 Today: 29th June 2026
1 SP: $298USD, Market Cap: $9.92B, Annual Revenue: $4.98Bn
2 TTM EPS (diluted): 17.37, (Normalised): 17.89, (Zack's): 17.37 (SA): 17.37. Hence i will use 17.37 as the TTM EPS & Normalised EPS. I will ignore the 17.89 from Morningstar.
3 Yield TTM (Dividend): 2.50, (5YrAverage): 1.17, (Buy Back Yield): 3.86%, (5YrAverage): 2.51%
4 ROA. ROE, ROIC: 31.8%, - , -
5 P/E (Diluted and Normalised) = 17.15, (5 year average): 26.6. P/E (Fwd): 15.47
6 Debt / Equity: - Net Debt / EBITDA = (5135.7 - 232.9) / 1030 = 4.86
7 FCF Conversion: FCF/NI = 96.9% to 98% over average 5 and 10 years.
**8 Stated Growth (past):**
|Periods CAGR%|Qtr / YOY|1yr|3yrs|5yrs|10yrs|
|:-|:-|:-|:-|:-|:-|
|Revenue|3.47|4.96|2.88|3.71|8.34|
|Net Income|\-6.58|3|9.98|4.14|12.05|
|EPS|\-4.62|5.37|11.93|7.24|17.61|
**9 Manually calculated growth (past):**
Pre-covid (2016 to 2019): (9.61/4.32)\^(1/3) -1 = 30.5%
Post-Covid ( 2022 to 2025): (17.58/12.11)\^(1/3) -1 = 13.22%
Whole period (17.58/4.32)\^(1/9) -1 = 16.87%
**10 Management Guidance**
2026 SSS USA "up to low single digit" (Q1 call), previously "3%" (Q4 call)
2026 SSS International "low single digits" (Q1 call), previously "1% to 2%" (Q4 call)
2026 expect 175+ net stores in USA and 800 net stores internationally
**11 Analyst Estimates for next 3 to 5 years EPS growth CAGR**
a SA dot com: stated growth: 11.28%, manually calculated 5yrs : 9.7%, 10yrs: 10%
b Zacks' 11.30% next 5 years CAGR
c DCF dot com, manually calculated next 5 years CAGR: 9.8%
**12 My estimates for fairvalue**
|Scenario|Year 1 to 5 Growth|Year 6 to 10 Growth|Terminal Growth|Multiplier|Fair Value|
|:-|:-|:-|:-|:-|:-|
|A|9%|5%|3%|23.72x|412|
|B|9%|\-|3%|22.17x|385|
|C|5%|5%|3%|20x|347|
|D|5%|\- |3%|18.72x|325|
|E|\-|\-|3%|17x|297|

The "-" does not denote no-growth, but merely no abnormal growth, just terminal growth of 3%. Discount is 9% and Terminal Growth is 3%
13 **Morningstar fairvalue** for DPZ is $412. And **CFRA fairvalue** for DPZ is 277.47
**14 My Notes:**
a. Log Linear Regression shows that from 2000 to 2025 (excluding the one time structure change in 2003), the continous earnings growth is around 16-18% a year, and the consistency is around 88%, In the last 10 years, manually computed CAGR and Stated past growth rates has been around 16-17%. However, analysts are only forecasting 10-11% a year for the next 5 years. And the market is only estimating earnings growth at 3% (last SP is around 298 versus scenario E of 297). Is it mispriced? it sure seems so, especially since buy back was around 4% (3.86%) in the past 12 months and the past 5 years average buy-back yield was around 2.51%
b. So what is the fair value ? I don't really know but i am of the opinion that is probably Scenario B or C and buying at Scenrio E at the current price isn't a bad proposition.
**15 A word about the Debt Level and next steps**
This is a very unique business, and due to its franchise model. it is asset light. The other thing is that this company is very consistent with generating free cash flow (see point 7). The two red flags **high debt level** and **negative equity** is related, and it isn't a really red flag: the company borrows money using its franchise agreements and royalties as collateral. And it uses the borrowed money to pay off old debts and engage in sharebuy back. The management has a 4-6x target. This past Q1, they noted that the net debt/ebitda fell from 4.6 to 4.3 and hence it received board authorisation to buy back more shares (and increase debt). Like MCD and Starbucks, buying back too much shares will eventually result in negative equity.
If i were to proceed with further due diligence, i would want to do a pre-mortem on what scenario would i need to watch out for that could be dangerous for this share buy-back with debt exercise. Would a slow down be a problem with cash flow or would it just stop the buy backs ?
I know that they had no problems in 2020 during the pandemic, restaurants failed but DPZ thrived due to its fleet of delivery riders. During the 2008 financial crisis, while the USA business performance slowed down with a -5% SSS in 2008, the international segment grew and tightly managed capex insulated corporate cash flows. Would the international business today still cushion the company should the USA business slow down (which it is at the moment) ?
These questions i would want to investigate further if i intend to buy the stock. (out of scope for this simple Valuation)