| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | 0.10 | -100 |
| Graham Formula | 0.40 | -100 |
DP Eurasia N.V. (LSE: DPEU) is a leading operator of Domino's Pizza franchises in Turkey, Russia, Azerbaijan, and Georgia, specializing in pizza delivery and takeaway services. Headquartered in Amsterdam, the company operates a hybrid model of corporate-owned and franchised stores, with 809 locations as of December 2021 (615 franchised, 194 corporate). Founded in 1996, DP Eurasia has established itself as a key player in the fast-food industry across emerging markets, leveraging the globally recognized Domino's brand to drive growth. The company benefits from strong brand loyalty, efficient delivery networks, and a scalable franchise model. Operating in the consumer cyclical sector, DP Eurasia capitalizes on rising demand for convenience food in its markets. Its presence in high-growth regions like Turkey and Russia positions it well for expansion, though geopolitical risks in these areas remain a consideration for investors.
DP Eurasia presents a compelling investment case due to its dominant position in the pizza delivery market across Turkey and Russia, supported by a scalable franchise model and strong brand recognition. The company reported solid financials for FY 2022, with revenue of £221.97M and net income of £20.2M, demonstrating profitability despite operating in volatile regions. Its low beta (0.789) suggests relative stability compared to the broader market. However, risks include exposure to geopolitical tensions in Russia and currency fluctuations in emerging markets. The lack of dividends may deter income-focused investors, but growth potential in underpenetrated markets like Azerbaijan and Georgia could drive long-term value. Investors should weigh the high-growth prospects against regional instability.
DP Eurasia's competitive advantage lies in its exclusive rights to the Domino's Pizza brand in its operating regions, providing instant brand recognition and customer trust. The company benefits from Domino's global supply chain efficiencies and technological innovations in delivery logistics. Its hybrid ownership model (franchised and corporate stores) allows for capital-efficient expansion while maintaining quality control. In Turkey, DP Eurasia faces competition from local pizza chains like Pizza Hut (owned by Yum! Brands) and regional players, but its focus on fast delivery and digital ordering platforms gives it an edge. In Russia, geopolitical challenges have disrupted operations, but the Domino's brand remains resilient. The company's ability to adapt menus to local tastes (e.g., Turkish-inspired toppings) further strengthens its positioning. However, rising competition from food delivery aggregators (e.g., Yemeksepeti) and dark kitchen concepts poses a long-term threat. DP Eurasia's scale and franchise network provide cost advantages, but inflation in key markets could pressure margins.