One-glance verdict
Within fair range
$132.29 our estimate vs market $129.35
Wall Street consensus: $127.32 (-3.8% lower than our fair-value estimate)
2% below our estimate
Fundamentals snapshot
Dollar Tree, Inc.
DLTR · NMS · Consumer Defensive · Discount Stores
Current price
$129.35
52-week range
$84.71 - $142.40
Market cap
$24.86B
Balance sheet
Stretched
19.33x Strong cushion
Net debt $6.59B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 1.7% last year.
- Reward Returns 34.0% on equity, ahead of 50% of its peers.
- Risk Operating margin compressed from 13.6% to 9.1% over 3 years.
- Risk Stock trades 4.5% above its 5-year average P/E.
What this company does
Dollar Tree, Inc.
Dollar Tree operates discount stores selling a mix of everyday items like food and cleaning supplies, alongside seasonal goods and toys. A large portion of its revenue (the total money brought in from sales) comes from these low-cost consumable products, which is important because it encourages customers to return regularly for things they always need.
How the company got here
Dollar Tree's story starts in 1953 with a variety store in Virginia. The modern version of the company began in 1986 as a store called "Only $1.00". A key moment was in 1995 when it became a public company, which means anyone can buy a small piece of the company, called a stock, providing money for it to grow. Over the years, it bought several other discount store chains to expand its reach across the United States and into Canada. A major, but challenging, turning point was the purchase of the Family Dollar chain in 2015, which greatly increased the company's size but also brought difficulties in combining the two businesses.
What it actually does
Dollar Tree is a discount retailer, which means it sells a wide variety of items at low prices. You'll find everyday items like cleaning supplies, food and snacks, and health and beauty products. They also sell party supplies, seasonal decorations for holidays like Halloween and Christmas, toys, and school supplies. The main idea is to offer these goods to shoppers who are looking for a bargain.
Dollar Tree
This is the company's main and original business, known for its "thrill-of-the-hunt" shopping experience where customers can discover new items. For a long time, everything in these stores cost just one dollar. Recently, they have shifted to a multi-price point strategy (offering items at different prices, like $1.25, $3, and $5) to sell a wider variety of products. These stores are often located in suburban areas and cater to middle-income families looking for deals on a mix of everyday needs and fun, discretionary items (things you want but don't necessarily need).
Family Dollar
This is a separate chain of stores that Dollar Tree owned for several years before recently announcing its sale. Family Dollar stores are typically found in urban and rural neighborhoods and serve more low-income customers. They focus on providing everyday essentials and convenience items, with prices generally ranging from $1 to $10. This part of the business operates as a neighborhood convenience store, offering items like groceries, cleaning supplies, and clothing.
What management is betting on now
The company's main focus is on improving its Dollar Tree stores by remodeling them and expanding the variety of products offered at different price points, like $3 and $5. This multi-price strategy is a big bet that allows them to sell items they couldn't before and attract more customers. They are also investing heavily in their supply chain (the system of warehouses and trucks that gets products to the stores) to make sure shelves are well-stocked. By selling the Family Dollar business, management is concentrating all its efforts on making the core Dollar Tree brand more profitable and a better place for customers to shop.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q3
$-193.80M
FY2025 Q4
$359.20M
FY2026 Q1
$758.70M
FY2026 Q2
$129.70M
FY2026 Q3
$15.60M
FY2026 Q4
$-57.10M
FY2027 Q2
$391.50M
Revenue
$4.98B
Net income
$347.30M
Diluted EPS
1.76
Operating cash flow
$644.00M
Free cash flow
$391.50M
Fetching…
Sources
Revenue
$4.75B
Net income
$244.60M
Diluted EPS
1.20
Operating cash flow
$319.30M
Free cash flow
$-57.10M
Fetching…
Sources
Revenue
$4.57B
Net income
$188.40M
Diluted EPS
0.91
Operating cash flow
$260.70M
Free cash flow
$15.60M
Fetching…
Sources
Revenue
$4.64B
Net income
$343.40M
Diluted EPS
1.61
Operating cash flow
$378.50M
Free cash flow
$129.70M
Fetching…
Sources
Revenue
$5.00B
Net income
$-3.70B
Diluted EPS
-17.17
Operating cash flow
$857.50M
Free cash flow
$758.70M
Fetching…
Sources
Revenue
$7.57B
Net income
$233.30M
Diluted EPS
1.08
Operating cash flow
$785.60M
Free cash flow
$359.20M
Fetching…
Sources
Revenue
$7.38B
Net income
$132.40M
Diluted EPS
0.62
Operating cash flow
$306.90M
Free cash flow
$-193.80M
Fetching…
Sources
Is it cheap or expensive?
Fair value $132.29 vs current price $129.35
Wall Street consensus is the average analyst price target: $127.32 (-3.8% lower than our fair-value estimate).
Our most-likely fair value is $132.29 a share — about 2.3% away from today's price of $129.35, so the stock currently looks fairly priced.
Is it drowning in debt?
Stretched
Net debt $6.6B. Interest coverage 19.3x.
Net debt
$6.59B
Interest coverage
19.33x
Dollar Tree, Inc.'s profit covers its interest bill about 19.3 times over. which is stronger than most peers shown here.
Stretched
Worse cushion
Baseline
Better cushion
DLTR
BASELINE
Dollar Tree, Inc.
Total debt $7.59B Interest coverage 19.33x This is the baseline the peer rows are being compared against.
Total debt $15.80B Interest coverage 9.56x -51% vs DLTR Carries about 2.0x less debt cushion than DLTR.
Total debt $4.72B Interest coverage 71.36x +269% vs DLTR Carries about 3.7x more debt cushion than DLTR.
Total debt $2.00B Interest coverage 34.71x +80% vs DLTR Carries about 1.8x more debt cushion than DLTR.
What you should know
The case for and against DLTR
3 Rewards
3 Risks
Rewards
-
Revenue grew 1.7% last year.
-
Returns 34.0% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Operating margin compressed from 13.6% to 9.1% over 3 years.
-
Stock trades 4.5% above its 5-year average P/E.
-
Insider ownership is only 0.2% (peer median: 1.7%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
20.76x
Forward P/E
16.84x
P/B
7.13x
P/S
1.26x
EV/EBITDA
12.90x
PEG ratio
1.59x
Profitability
How much profit each dollar creates
Gross margin
37.0%
Operating margin
9.1%
Net margin
6.5%
ROE
34.0%
ROA
6.7%
Health
Liquidity and balance-sheet strength
Debt / equity
2.17x
Current ratio
1.16x
Quick ratio
0.32x
Total debt
$7.59B
Total cash
$1.01B
Growth
How the business has been compounding
Revenue TTM
$19.75B
Revenue 5Y CAGR
-7.3%
EPS TTM
6.23
EPS 5Y CAGR
-4.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$2.46B
Free CF TTM
$1.06B
FCF margin
5.4%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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