Should You Buy This Warren Buffett Stock After Earnings?

The dip could provide a buying opportunity.

Stocks that Berkshire Hathaway (NYSE:BRKa) and its CEO Warren Buffett invest in usually get a lot of attention from investors. For the most part, Buffett has been incredibly successful, as his track record would suggest.

On Monday, one of the latest additions to the Berkshire Hathaway portfolio, Domino’s Pizza, posted mixed second quarter earnings, and the stock price was trending lower, down around 2.5%.

Should investors be eyeing this Buffett stock as a potential buy, post earnings?

Earnings Miss a Concern?

Fast food and limited-service restaurants have been a bit of a mixed bag in this economy. But those that rely heavily on delivery, like Domino’s Pizza Inc (NASDAQ:DPZ), have generally fared better than the others.

This was evident in the pizza chain’s Q2 earnings, as the company generated revenue of $1.15 billion, up 4.35% year-over-year. That beat Wall Street estimates of $1.14 billion. Sales were buoyed by same-store growth in the U.S. of 3.4% and 2.4% internationally. Also, the chain added 178 new restaurants – 30 in the U.S. and 148 internationally – adding to its sales increase.

However, the company failed to meet earnings estimates, as net income dropped 7.7% to $131 million, or $3.81 per share. This was below earnings estimates of $3.93 per share.

The earnings miss may have been why the stock was down on Monday, but a closer look adds some important context. Operating income was actually up 14.8% in the quarter to $225 million. The reason that the net income was lower was due to several factors that do not directly reflect operations.

The main issue was a charge of $27.4 million in unrealized losses associated with the company’s investment in DPC Dash. Also, a $12.1 million increase in the provision for income taxes contributed to the decrease in net income as the tax rate increased to 22.1% in the second quarter of 2025 as compared to 15.0% in Q2 of 2024.

“Internationally, we continued to grow despite macro challenges. In the U.S., both delivery and carryout grew, driving meaningful market share gains within the U.S. pizza QSR category,” Russell Weiner, Domino’s CEO, said. “We are now fully rolled out on the two largest aggregators and offer all the major crust types, including stuffed crust. With what we believe are best-in-class unit economics, the largest advertising budget, a robust supply chain, and a rewards program that is bigger than ever, our business is well-positioned. We’ve never had more tools to drive long-term value creation for our franchisees and shareholders.”

Will Domino’s Deliver for Investors?

Domino’s stock is considered a buy by most analysts, with a price target of $530 per share, which would suggest 16% growth over the next year. Currently, Domino’s stock is up 11% year-to-date and 16% over the past 12 months, trading at roughly $455 per share.

Recently, Morgan Stanley boosted Domino’s price target to $514 per share and maintained its buy rating while Melius initiated a neutral rating with a $500 price target.

The stock is trading at around 27 times earnings, which is a bit high, given the sluggish economic outlook. But the stock is well-positioned, given its leadership position in the market, its international growth, and its market share gains. And delivery grew in Q2, which is a reversal from the past two quarters.

One wildcard is the economy. The macro environment should improve, but the uncertainty around tariffs remain. Overall, the dip should put this solid Buffett stock squarely on your radar.

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