Domino’s Pizza, Inc. (ticker: DPZ ) shares initially traded higher by nearly 4 percent on Thursday after the company delivered yet another strong quarter of earnings and revenue growth to kick off 2017. However, with the stock now up more than 400 percent in the past five years, some Wall Street analysts are growing leery of Domino’s steep market valuation.

On Thursday morning, Domino’s reported first-quarter earnings per share of $1.26 on revenue of $624.2 million. Both numbers topped consensus analyst estimates of $1.16 and $615.5 million, respectively. Net income was up 37.4 percent from a year ago, while revenue jumped 15.8 percent.

Domestic same-store sales grew by 10.2 percent, while international same-store sales were up 4.3 percent.

[Read: 7 Companies That People Are Boycotting Because of the Trump Family .]

“It was a great start to 2017, as momentum continued with solid growth in our international business and our third consecutive quarter of double-digit same-store sales growth in the U.S.,” CEO J.Patrick Doyle says in the earnings release.

But while Domino’s investors have nothing to complain about when it comes to the company’s fundamental performance , Stephens analyst Will Slabaugh says the stock’s massive move in recent years likely limits its potential upside for now.

“We [continue] to view DPZ as the pizza category leader with substantial white space to continue its unit growth trajectory, and we feel DPZ remains at a technology advantage versus peers,” Slabaugh says.

“However, despite favoring the model and the management team, we believe most of the positives are in the stock at 20 times EBITDA (earnings before interest, tax, depreciation and amortization).”

Compared to pizza rivals Papa John’s ( PZZA ) and Pizza Hut parent Yum! Brands ( YUM ), Domino’s shares currently trade at a steep premium in terms of both trailing and forward price-to-earnings ratios.

[Read: 5 Top Restaurant Stocks for Dividend Income .]

Stephens maintains an “equal weight” rating on Domino’s stock.

Compare Offers

Compare Offers