Are These Beaten Down ASX Stocks Good to Buy Now?

Team Veye | 07-Jul-2025

Domino’s Pizza Enterprises Ltd (ASX: DMP): Is This the Right Time to Slice into a Long-Term Growth Opportunity?

Reset in Progress - A Company in Transition

Domino’s Pizza (ASX: DMP), a household name across global fast-food markets, is navigating a pivotal reset. The company has recently announced a change in executive leadership, with Jack Cowin stepping in as Executive Chair. Under strategic reset initiatives, DMP closed 205 underperforming stores, cut low-return spending, and replaced key executives across IT, marketing, and finance. While the restructuring may unsettle short-term investors, it demonstrates a commitment to long-term unit economics and operational simplicity.

Financial Snapshot – Earnings Stabilising

In H1 FY25, Domino’s reported EBIT of $100.6 million, down 6.7% YoY but slightly up (+0.7%) from the previous half. Group network sales slipped 2.9% to $2.08 billion, impacted by FX headwinds and store closures. Same-store sales dipped 0.6%, reversing last year’s +1.3% growth. Yet, franchisee profitability improved 13.7%, averaging $96,400 EBITDA on a rolling 12-month basis a strong foundation for future growth. A dividend of 55.5 cents per share (unfranked) was declared, reflecting continued shareholder commitment even amid transformation.

Valuation Dip or Value Trap?

A recent share price slump from $19.13 to $14.86 in just two days drew ASX scrutiny, though the company denied knowledge of undisclosed material events. The volatility underscores investor anxiety during leadership changes and uncertain market updates. However, no material downgrade has been flagged, and DMP reaffirmed its strategic direction. With improved franchisee economics and a new leadership vision pending, this may be a near-term overreaction.

Why Long-Term Investors Should Pay Attention

DMP’s focus on unit-level profitability, cost simplification, and leadership renewal could unlock future margin expansion, particularly in Japan and Europe. Recent executive hires, like ex-Pizza Hut and McDonald’s senior Phil Reed in Europe, signal a sharper focus on turnaround markets. The underwritten dividend reinvestment plan (DRP) shows management’s push to retain capital while rewarding shareholders. If the new CEO delivers, today’s valuation could prove attractive.

Verdict: A Strategic Slice Worth Considering

With operational resets gaining traction and franchise-level economics strengthening, Domino’s is setting itself up for a stronger, more scalable future. The recent dip has created an attractive entry point for those seeking exposure to a global brand refocused on profitability and long-term growth. For investors who look beyond short-term headlines, this may be the moment to place a smart, forward-looking bet on the next phase of Domino’s evolution.

Spark New Zealand Ltd (ASX: SPK): A Low-Voltage Share Price with High-Voltage Potential?

Tech-Led Transformation at the Core

Spark New Zealand (ASX: SPK) is no longer just a telco it’s transforming into a tech infrastructure platform with deep integration of automation, AI, and cost efficiency. Recent partnerships with Nokia and Infosys mark a full transformation of Spark’s network and IT delivery model. By outsourcing day-to-day operations while keeping strategic control, Spark aims to boost agility and lower costs under its SPK-26 Operate Programme. These moves are expected to generate $80–$100 million in FY25 cost savings, with $110–$140 million in annualised benefits by FY27.

Dividend Still Shines

Despite muted topline growth, Spark continues to reward shareholders. For the half ending 31 December 2024, Spark declared an interim dividend of NZD 0.125 (with A$ equivalent 0.129), plus a supplementary dividend of NZD 0.0165, all 100% unfranked. The DRP was reactivated with a 2% discount, highlighting Spark’s commitment to shareholder returns alongside internal reinvestment.

Fundamentals Stable - But Growth Sluggish

While recent earnings figures were not detailed in the update, Spark’s strategy is clearly margin-led rather than volume-led. It’s betting on automation and partnerships to reduce opex rather than top-line revenue spikes. Liquidity remains solid, and it continues to hold strategic control of critical IT and network assets, even as operational execution is increasingly handled by global partners.

Undervalued in Plain Sight?

Spark trades at a modest valuation compared to global telco peers, possibly due to market fatigue with the sector. But its digital transition is deeper than cosmetic it’s embedding AI into network monitoring, customer service, and product delivery. With reduced operating costs and steady dividends, it may appeal to income-focused investors seeking defensive assets with tech upside.

Verdict: Steady Signals in a Market Full of Noise

Spark’s transformation isn’t flashy but it’s effective. The company is embedding automation, AI, and tech partnerships to build a leaner, smarter infrastructure, while maintaining one of the most consistent dividend streams in the region. With cost-out benefits starting to flow and long-term value-building underway, Spark offers stability with upside potential. For investors seeking dependable income and quiet compounding over time, this may be the right moment to tune in.

(Source: Company Announcements)

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