Domino’s (NASDAQ DPZ) reported weak FQ2 results, with slowing growth and contracting earnings. However, improved business leverage, profits, and substantial capital return offer optimism. The market’s knee-jerk reaction led to a fall in share prices, making DPZ attractive to buy-and-hold investors.

Institutional investors are likely to buy on the price pullback, having netted nearly $2 in shares for every one sold. Institutional ownership stands at nearly 95%, providing solid market support. Domino’s revenue in Q2 was $1.15 billion, with global retail sales up 5.6%, driven by store count and comp-store growth.

Domino’s faces challenges in 2025, particularly around input costs and margin compression. Despite this, the company continues to grow its store count and comparable sales, boosting operational leverage. The company’s earnings are forecasted to exceed 10%, with buybacks reducing the share count by nearly 1% YTD.

Analysts forecast steady mid-single-digit revenue growth and accelerating earnings growth for Domino’s. Stock prices value the business at a significant discount, with a Moderate Buy rating. The opportunity lies in loading up on shares when they are low in the range, building a position for when macroeconomic headwinds subside.

Read more at Nasdaq: Domino’s Delivers Another Discounted Entry for Income Investors