What Is Domino's Pizza Group plc's (LON:DOM) Share Price Doing?

While Domino's Pizza Group plc (LON:DOM) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the LSE, rising to highs of UK£4.37 and falling to the lows of UK£3.49. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Domino's Pizza Group's current trading price of UK£3.68 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Domino's Pizza Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Domino's Pizza Group

What's the opportunity in Domino's Pizza Group?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 7.97% above my intrinsic value, which means if you buy Domino's Pizza Group today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is £3.40, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, Domino's Pizza Group has a low beta, which suggests its share price is less volatile than the wider market.

What does the future of Domino's Pizza Group look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a relatively muted profit growth of 6.5% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Domino's Pizza Group, at least in the short term.

What this means for you:

Are you a shareholder? DOM’s future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on DOM, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example, Domino's Pizza Group has 3 warning signs (and 1 which is significant) we think you should know about.

If you are no longer interested in Domino's Pizza Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.