Can Domino's Pizza Kick Back Into High Gear in 2026?

Domino's Pizza has seen growth slow—global sales rose 5.5% through nine months of 2025 versus 6.5% a year earlier and U.S. same-store sales have decelerated to 2.7% from 4.5%—leaving the stock roughly flat year-to-date and about 26% below its early‑2022 high. The pullback cut the P/E from over 34 last year to under 25 (around 25% below its 10‑year average), a valuation shift that attracted Berkshire Hathaway, which has accumulated an 8.8% stake now worth roughly $1.2 billion; analysts project 10–11% annual EPS growth over the next 3–5 years, implying about 12–14% annualized total returns including dividends. Given Domino’s durable, low‑cost franchise model and opportunity to take share in a fragmented U.S. market, the article frames the current price as a buyable value opportunity for a rebound in 2026, though Motley Fool did not include DPZ in its own top-10 picks.

Analysis

Domino's Pizza has experienced a clear slowdown in growth: global sales rose 5.5% through nine months of 2025 versus 6.5% a year earlier, and U.S. same-store sales decelerated to 2.7% from 4.5% in 2024. The share price is essentially flat in 2025 (down 0.6%) while the S&P 500 is up 16.4% YTD, leaving DPZ about 26% below its early‑2022 high despite a decade in which it outperformed the index (280% vs. 232%).

Valuation has compressed materially, with the P/E falling from above 34 mid‑last year to under 25, roughly 25% below the 10‑year average, which the article frames as creating a buyable entry. Berkshire Hathaway has accumulated an 8.8% stake now worth about $1.2 billion and has added each quarter since its initial Q3 purchase, a value‑oriented endorsement though not a substitute for revenue momentum.

Analysts forecast 10–11% EPS CAGR over the next 3–5 years, implying 12–14% annualized total returns including dividends if forecasts hold; Domino's durable franchise model, pricing and technology advantages underpin that view. Key risks are continued consumer pullback and prolonged U.S. same‑store softness; a clear re‑acceleration in comps and margin stability would be the primary catalysts for a meaningful re‑rating.

Key Decisions for Investors

• Consider initiating a modest, staged long position given the P/E decline to under 25, Berkshire Hathaway's 8.8% stake and analyst EPS growth of 10–11% over 3–5 years, but size exposure to fit overall risk limits
• Use dollar‑cost averaging and await confirming operational signs—stabilization or re‑acceleration of U.S. same‑store sales from the current 2.7% level and evident margin resilience—before increasing position size
• Monitor leading indicators closely: U.S. and global same‑store sales, margin trends, franchisee unit economics and any material changes in Berkshire's holdings, and be prepared to hedge or trim exposure if consumer spending weakness deepens
• Do not rely solely on Berkshire's accumulation as a buy signal and treat the position as contingent on improving fundamentals since DPZ was not listed among the Motley Fool's top picks