Domino's Pizza Stock Looks Cheap - Short Put Plays Work Here Mark R. Hake, CFA Tue, August 11, 2026 at 3:15 PM GMT+2 3 min read DPZ Dominos Pizza Inc delivery by- Bjoern Wylezich via iStock Domino's Pizza (DPZ) stock may be undervalued based on its strong free cash flow (FCF) and upside in analysts' price targets. Short put plays one month from now have a 2.0% yield at a low out-of-the-money strike price.
DPZ stock closed at $347.85 on Monday, Aug. 10. That's 5.38% down from a recent peak of $367.64 (Aug. 4), but up from a recent trough on July 22 ($319.83). This was after it released strong results on July 20.
But it could be worth much more. More News from Barchart Cisco Systems Is In a Trading Range Ahead of Earnings - Shorting OTM Puts and Calls Works Investors Trade Corning Inc Long-Dated Call Options in Unusually Heavy Volume - Bullish on GLW Option Volatility And Earnings Report For Aug 10-14 Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else.
Domino's Pizza (DPZ) stock - last 3 months - Barchart - Aug. 10, 2026 I wrote about this in a July 21 Barchart article, just after it released results ("Domino's Pizza Delivers Strong FCF and FCF Margins - Is DPZ Stock Too Cheap?). DPZ could be worth $417 per share (my price target), based on analysts' 2027 revenue forecasts ($5.31 billion), a 13% FCF margin (i.e., $690 million FCF), and a 5% FCF yield metric: $690.3m FCF /0.05 = $13.8 billion fair market value (FMV) That's 20% over its present market cap of $11.5 billion (Yahoo! Finance), so the price target is 20% over today's price: $347.85 x 1.20 = $417.42 per share (price target) Analysts have slightly lower price targets.
Finance is at $386.74 (30 analysts), and Barchart's mean survey PT is $389.75. That's why I suggested shorting out-of-the-money (OTM) puts to set a lower buy-in. It worked out well and will do so again.
Shorting Puts Works with DPZ I discussed shorting the $300.00 strike price put contract on July 21 (expiring a month later on Aug. 21) when DPZ was at $328.97 on July 21. That was just after the July 20 earnings release. The investor could earn a one-month yield of 1.42% since the premium received was $4.25 (i.e., $425/$30,000 invested).
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