Domino's Pizza Stock Is Dirt Cheap, With 30% Potential Upside - What's the Best Play?
Domino's Pizza (DPZ) stock has been on a downward trend, currently trading at $294.20, near its 6-month low of $283.03. Analysts' price targets range from $381.11 to $412, suggesting a potential 40% upside from the current price. The stock is undervalued based on its strong free cash flow (FCF) and high FCF margins, with an average 12-month FCF margin of 13%.
Analysts have lowered their revenue forecasts for 2026 and 2027, but DPZ's FCF still remains robust. Two investment strategies to capitalize on this potential upside are selling short near-term out-of-the-money (OTM) put options and buying long-dated in-the-money (ITM) calls.
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