Dollar Tree, Inc. (DLTR) stock analysis

P/E below its 5-year median

Dollar Tree's P/E of 17.4 is below its own 5-year median of 21.1.

P/E below the industry

Dollar Tree's P/E of 17.4 is below the Variety Stores median of 22.5.

EV/EBITDA below its 5-year median

Dollar Tree's EV/EBITDA of 13.0 is below its 5-year median of 15.7.

P/B above the industry

Dollar Tree's price-to-book of 7.83 is above the Variety Stores median of 5.57.

Trading below fair value

The share price of $142.90 is below our fair value estimate of $157.58.

Margin of safety under 20%

The price is 9.3% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 8.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -4.8% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 8.2% over the last twelve months; the Variety Stores median is 9.6%.

Guidance raised

Dollar Tree raised its Fiscal 2026 Adjusted diluted EPS outlook on Aug 27, 2026.

Gross margin improving

Gross margin was 38.7% over the last twelve months, against 35.8% a year earlier.

Return on equity under 15%

Return on equity was 45.9% over the last twelve months and averaged 0.9% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 30.3%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Dollar Tree's return on equity of 45.9% is above the Variety Stores median of 24.9%.

Earnings shrank over 5 years

Net income shrank 0.9% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 8.0% over the last twelve months, against a 5-year average of -0.2%.

Net margin above the industry

Dollar Tree's net margin of 8.0% is above the Variety Stores median of 4.0%.

High debt

Debt is 85.6% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 44.3% five years ago to 85.6%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 106% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 1.13 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.85; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Dollar Tree has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.