Determinants of long-term stock performance

: how Domino’s IPO outperformed its 2004 cohort and surpassed alphabet

Abstract

The dissertation investigates the exceptional long-term performance of Domino’s following its 2004 Initial Public Offering (IPO), comparing it to 85 other companies that went public in the United States during the same year. Inspired by various press articles claiming that Domino’s outperformed not only its industry peers but also tech giant Google (Alphabet Inc.), this study aims to validate these assertions while identifying the key determinants of long-term IPO performance in general and the specific factors behind Domino’s success. The findings confirm that Domino’s delivered the highest Long-term returns among its 2004 cohort, challenging traditional assumptions about the dominance of technology companies in generating sustainable financial growth. Regression analysis reveals that Domino’s re- markable performance can be attributed to its notably high Sales-to-Assets ratio and significant leverage at the time of the IPO, which reflected operational efficiency and financial discipline. Furthermore, the research acknowledges that Domino’s success extends beyond these initial conditions, emphasising how corporate and strategic decisions, including early adoption of digital innovations and a scalable franchising model, enabled the company to thrive across global markets and sustain its exceptional performance.

Date of Award	31 Jan 2025
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Geraldo Cerqueiro (Supervisor)