Domino’s Pizza, Inc. (NASDAQ:DPZ) has not performed for investors in 2022. As a result, the stock is down more than 33%. That’s significantly higher than the S&P 500 index, which is posting an annual loss of 19%.

The company has faced rising ingredient costs and difficulty finding drivers due to higher inflation. This is evident from the company’s earnings reports. As a result, earnings over the past four quarters have fallen short of expectations.

But analyst sentiment is improving. And in this article, we explain why it may be time for investors to take a bite out of DPZ stock as it trades below its pre-pandemic price.

Pizza has pricing power

A major reason for analyst optimism is that Domino’s will enter 2023 with the highest prices in more than a decade. And analysts believe the company has room to increase prices on its $7.99 takeout deal and its $6.99 Mix & Match deal.

This comes as analysts believe the company’s ingredient costs are about to level off or drop slightly. That combination will support higher margins, more substantial revenues and a higher share price.

Determine the true cost of pizza delivery

According to Statista, consumer spending on pizza delivery hit a new record of $19.8 billion by 2021. That was the main year-over-year growth and was up $14 billion in 2020 and $11 billion in 2019.

And spend the United States $11 billion a year in pizza delivery. But of course that’s just pizza delivery, not total food delivery. And Domino’s has the largest market share, with 31% of the actual amount consumers spend on pizza.

But that growth has a price tag. Specifically, the company finds it difficult to find and pay drivers in a tight labor market. However, analysts believe that the current wave of layoffs, hiring freezes and continued inflation is likely to increase the candidate pool of willing drivers.

And even if it doesn’t, the company says it does some evidence that inflation is causing consumers to forego pizza delivery. However, the company is also recovering its “pick-up tipthis holiday season, which can have the combined effect of boosting demand and helping the company through supply issues.

Is it time to buy DPZ shares?

Strictly based on value, there may be better options out there right now. The stock still has a P/E ratio that is higher than the industry average. However, if the company meets expectations for high-single-digit earnings growth over the next five years, Domino’s could grow toward that valuation.

And while you wait, Domino’s offers a tasty dividend. While the 1.23% dividend yield may not excite investors, it can be deceptive. The company pays out $4.40 per share, has a sustainable payout ratio of approximately 33%, and has increased its dividend in each of the past ten years.