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Dollar General ( DG ) is back in focus with a batch of upbeat analyst updates and fresh optimism around its expansion plans, including a larger Nashville headquarters and hundreds of new and remodeled stores.
Check out our latest analysis for Dollar General.
Recent headquarters expansion and store rollout plans have seen the share price climb to around $148.74, a 90-day share price return of around 41% and a 1-year total shareholder return of over 120%, indicating strong momentum despite weak multi-year total shareholder returns.
If you have your eye on Dollar General’s moves, now might be a good time to broaden your watchlist with fast-growing stocks with high insider ownership.
With shares close to $148.74 after a 90-day and 1-year bull run, yet with an implied intrinsic value suggesting a 14% discount, you have to ask: Is there still a buying opportunity here, or is the market already pricing in future growth?
Since Dollar General last closed at $148.74, compared to a story fair value of $122.68, the current price is above that implied estimate, which is built on detailed forecasts for revenue, margins and valuation multiples.
For you to agree with the analyst consensus, you need to believe that by 2028, revenue will be $46.9 billion, earnings will come in at $1.7 billion, and the business will trade at a PE ratio of 19.6x assuming you use a discount rate of 8.0%.
Read the full story.
Curious how steady mid-single digit revenue growth, strong margins and a prosperous future P/E all fit together? A full statement explains the stream of income needed to hold this rating.
Result: OVERVALUED at $122.68
Read the full story and understand what is behind the predictions.
However, steady earnings projections could be off course if store expansion leads to oversaturation, or rising labor costs continue to eat into margins.
Find out about the major risks of this dollar general story.
While the popular narrative pattern suggests Dollar General is about 21.2% overvalued, the SWS DCF model points the other way, with a fair value estimate of $172.43 versus the current $148.74. That 13.7% gap makes the recent run up less of a froth and more of a potential upside left on the table. Which story do you think fits the business best?
