Popular ... Domino’s has the largest slice of the nation’s pizza market. Source: Morningstar Australia. Source: Supplied

Domino’s Pizza Enterprises shares have doubled in price in the past 12 months and climbed more than 600 per cent in the past five years. From $2 a share in May 2005, the stock hit $41.64 last month and is currently trading near $37.

Its share price surge has propelled the company’s value to $3.3 billion but prompted some market watchers to warn it climbed too far too fast and is overpriced.

Other publicly-listed fast food companies, such as KFC franchise owner Collins Food Group and Retail Food Group — which owns Crust and Pizza Capers — have doubled their share price in recent years but delivered nothing like the growth of Domino’s.

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Morningstar equity analyst Farina Parsons said the Domino’s growth had come at the expense of Pizza Hut.

“Domino’s used to be number four in Australia — now they are number one,” she said.

“People love pizza and are eating more pizzas. The business is well-run and has a very strong management team.”

Domino’s CEO and managing director Don Meij, who started at the company as a pizza delivery driver in 1987, led its 2005 stock exchange debut as Australia’s first publicly-listed pizza chain.

Pizza supremo ... Don Meij, CEO of Domino's Austarlia, putting the finishing touches on a Supreme Pizza. Photo: Steve Pohlner Source: News Corp Australia

The company is chaired by Hungry Jacks founder Jack Cowin and its board includes former Telstra and Commonwealth Bank director Ross Adler.

“The big driver has been the expansion overseas in Europe and Japan,” Ms Parsons said.

She said based on current financial data the shares were “fully priced” but Domino’s had flagged further expansion that was not yet included in analysts’ forecasts.

Domino’s Australia holds the master franchise for the pizza chain in Australia, Japan, New Zealand, France, Belgium and The Netherlands, with 1450 stores.

“We don’t see any real downside potential as long as Australians continue to eat pizzas,” Ms Parsons said.

Catapult Wealth director Tony Catt said Domino’s had been a key player in the transition of the industry from local pizza bars to corporate franchises that were killing many mum-and-dad pizza shop operators with massive marketing and IT machines.

“It’s been a growth story around store rollout,” he said, but warned investors about diving in now.

Big slice of the market ... Domino's Pizza in Ellenbrook. Source: Supplied

“I think you have to be a bit careful. We think it is expensive at these levels. The rollout story goes for a while then the market gets saturated. I think the easy yards have been done.

“They are in the right place at the right time with what we are buying. Pizza is still something people find easy to order, and you could call it a relatively healthy option — but that depends on whether you get the cheesy crust.”

Some big investors have sold out of Domino’s to take profits, while others see more growth ahead.

A recent report by Morgan Stanley analysts James Bales put a $50 12-month price target on Domino’s shares and said the company had a history of beating lofty expectations.

Mr Bales said the market view of the company was too conservative.

“We think the bar is set too low over the forecast period and that Domino’s will surprise on store rollout, same store sales growth and margins,” he said.

Between 100 and 150 new stores were likely to be rolled out each year across Australia, Europe and Japan, Mr Bales said.