Dollar Tree (DLTR) Gains But Lags Market: What You Should Know

·3 min read

Dollar Tree (DLTR) closed the most recent trading day at $156.27, moving +0.27% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.06%. At the same time, the Dow added 1.05%, and the tech-heavy Nasdaq gained 0.4%.

Prior to today's trading, shares of the discount retailer had lost 2.04% over the past month. This has was narrower than the Retail-Wholesale sector's loss of 6.15% and the S&P 500's loss of 8.3% in that time.

Dollar Tree will be looking to display strength as it nears its next earnings release. On that day, Dollar Tree is projected to report earnings of $1.57 per share, which would represent year-over-year growth of 27.64%. Meanwhile, our latest consensus estimate is calling for revenue of $6.77 billion, up 6.76% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.15 per share and revenue of $28.07 billion, which would represent changes of +40.52% and +6.67%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Dollar Tree. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.18% higher within the past month. Dollar Tree is holding a Zacks Rank of #1 (Strong Buy) right now.

Investors should also note Dollar Tree's current valuation metrics, including its Forward P/E ratio of 19.12. This represents a no noticeable deviation compared to its industry's average Forward P/E of 19.12.

Meanwhile, DLTR's PEG ratio is currently 1.23. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Discount Stores was holding an average PEG ratio of 1.67 at yesterday's closing price.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 213, putting it in the bottom 16% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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