Why this top fundie says Domino's shares have 'bottomed out'

A top fund manager believes Domino's shares are now on sale.

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Domino's Pizza Enterprises Ltd (ASX: DMP) shares are pushing higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) fast food pizza retailer closed on Friday, trading for $14.65. In early afternoon on Monday, shares are changing hands for $14.79 apiece, up 1.0%.

For some context, the ASX 200 is down 0.3% at this same time.

Today's outperformance will be welcome news to loyal stockholders, who've watched Domino's shares sink 50.3% in 2025.

According to Ten Cap portfolio manager Jun Bei Liu, the ASX 200 pizza chain could continue to outpace the benchmark index in the coming months.

Top fundie says the bottom looks to be in

In some recent shakeups to the Ten Cap portfolio, Liu said she has been adding Domino's stock (courtesy of The Australian Financial Review).

She indicated the stock's sharp sell-off following the release of its FY 2025 results in August appeared to be overdone.

"Domino's share price fell quite dramatically on only slightly negative like-for-like store sales growth," she said.

Liu added, "The company is through quite a meaningful transformation by reducing costs and reinvesting, so I do think it has bottomed out and really looks interesting."

What's been pressuring Domino's shares?

The lion's share of the 2025 losses for the ASX 200 pizza company can be pinned on two horror trading days.

The first big sell-off came on 2 July.

Domino's shares closed the day down 15.8% after the company reported on the unexpected resignation of CEO Mark van Dyck.

"It has been a privilege to lead Domino's through a transformative period," Van Dyck said at the time. "With a clear strategy and strong team in place, I believe the time will be right at the end of this calendar year to hand over to the next CEO."

Van Dyck will exit his role on 23 December. The global hunt for his permanent replacement continues.

The other big hit to Domino's shares this year came on the heels of the company's FY 2025 results announcement on 27 August, which Liu referenced above.

Investors were overheating their sell buttons after the ASX 200 fast food retailer reported a 0.9% year on year decline in network sales to $4.15 billion.

In other core financial metrics, FY 2025 revenue of $2.30 billion was down 3.1% from FY 2024. And earnings before interest and tax (EBIT) was down 4.6% to $198 million.

On the passive income front, the board declared an unfranked final dividend of 21.5 cents per share, down 57.3% from the prior final Domino's dividend.

Domino's shares closed down 22% on the day.

But if Ten Cap's Liu has it right, shareholders should be seeing a lot more green than red in the months ahead.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Domino's Pizza Enterprises. The Motley Fool Australia has recommended Domino's Pizza Enterprises. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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