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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?
See how the SWS DCF model arrives at its fair value.
Simply Wall St calculates the discounted cash flow (DCF) of every stock in the world every day (see Dollar General for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when it changes, or use our stock screener to discover 866 undervalued stocks based on their cash flow. If you save a screener we’ll alert you when new companies are added – so you never miss a potential opportunity.
If you’re not completely on board with these assumptions or prefer to weigh the numbers yourself, you can shape a custom view in minutes: do it your way.
An excellent starting point for your dollar General research Our analysis highlights 3 major rewards and 2 important warning signs that may affect your investment decision.
If Dollar General is thinking more broadly about where to put new capital to work, don’t stop here. Your next standout idea may be just a filter away.
This article by Simply Wall St. is general in nature. We only provide commentary using an unbiased methodology based on historical data and analyst forecasts and our articles are not intended to be financial advice. It does not recommend buying or selling any stock, and does not take into account your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative content. Simply Wall St. has no position in any of the stocks mentioned.
Companies discussed in this article include DG.
Have feedback on this article? Worried about content? Contact us directly. Alternatively, email editorial-team@simplywallst.com
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