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World leader in pizza delivery, Domino's Pizza Inc. (DPZ - Analyst Report) attained a new 52-week high, touching $58.74 in the middle of the trading session on Monday, May 13. The closing price of Domino's on May 13 was $58.25, representing a solid 1-year return of about 79.6% and year-to-date return of about 28.6%. The average trading volume of the session was 0.6 million shares.

Despite hitting its 52-week high, this Zacks Rank #2 (Buy) stock has plenty of upside left, given its strong estimate revisions over the last 30 days and the expected year-over-year earnings growth of 14.25% for 2013.

Growth Drivers

The better-than-expected first-quarter results – including an earnings surprise of 5.36% and consistent performance of the overall portfolio – as well as international expansions, increasing global demand and effective pricing were the key growth drivers for Domino's Pizza.

Domino’s Pizza’s 96% restaurants are franchised. The company’s franchisee-based model helps it to control its capital requirements as well as facilitate earnings per share growth and ROE expansion.

On Apr 30, Domino's Pizza’s first-quarter 2013 adjusted earnings came in at 59 cents per share, outperforming the Zacks Consensus Estimate of 56 cents by 5.4% and that of the year-ago quarter by 25.5%. Amid a sluggish macroeconomic environment, higher top line, share repurchase activity and margin expansion pushed up the earnings during the quarter.

Quarterly revenues climbed 8.6% year over year to $417.6 million and surpassed the Zacks Consensus Estimate of $413 million by 1.1%. Domino's Pizza’s higher comparable restaurant sales (comps) growth, improved supply-chain as well as royalty revenues, increased traffic and unit expansion drove the top line during the quarter.

Additionally, Domino's Pizza has delivered positive earnings surprises for four straight quarters with an average beat of 5.2%.

Estimate Revisions Show Potency

For Domino's Pizza, over the last 30 days, seven of the nine estimates for 2013 have been revised upward, raising the Zacks Consensus Estimate by 3.4% to $2.40 per share. For 2014, over the last 30 days, six of the nine estimates moved upwards, resulting in an increase in the Zacks Consensus Estimate by 3.4% to $2.73 per share.

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