It has been a year to forget for the Domino's Pizza Enterprises Ltd (ASX: DMP) share price in 2022.
Since the start of the year, as you can see below, the pizza chain operator's shares have lost almost 50% of their value.
This has been caused by rising interest rates putting pressure on the valuation of growth shares and the negative impact of inflation on Domino's operations.
And while this is undoubtedly disappointing for its shareholders, I see it as a buying opportunity for the rest of us. So much so, I recently added this ASX 200 stock to my portfolio.
Why Domino's could be an ASX 200 stock to buy
I think Domino's is an ASX 200 stock to buy for 2023 due to its positive long-term outlook.
Although 2022 has been difficult, the headwinds the company is facing are transitory and already appear to be easing.
For example, during its most recent quarterly update, management revealed that its same-stores sales returned to growth in October and were up 1.6%.
Management also reiterated its medium-term goal of 3% to 6% same-store sales growth and 8% to 10% new store openings. The latter supports its aim of doubling its store network, before acquisitions, to 7,250 stores over the next decade.
In my opinion, this makes the almost 50% decline in the Domino's share price this year an incredible buying opportunity for investors that are looking to make a long-term investment.
After all, over the next 10 years, if Domino's can double its store network, deliver on its sales growth targets, and improve its margins (from FY 2022 levels) through scale benefits, it is possible that its earnings could triple over the period.
And that's before acquisitions. Management is also always on the lookout for earnings accretive additions that could bolster its growth. In fact, it recently completed the acquisition of Domino's Malaysia and Singapore and snapped up the remainder of its German joint venture.
And while there are risks to consider, such as inflation getting out of control or acquisition integration issues, I feel confident that the risk/reward on offer with this ASX 200 stock is compelling and makes it a buy.
