DLTR  Dollar Tree Inc.

Exchange

NASDAQ

Sector

Consumer Services

Industry

Department/Specialty Retail Stores

Market Cap.

18.53B

Vuru Grade

38.68/100

Current Price

$78.28
-0.52 (-0.66%)

Growth Price

$73.81
Overvalued by 5.71%

Stability Price

$39.63
Overvalued by 49.37%

Company Metrics

  • P/E 21.45
  • P/S 0.89
  • P/B 3.33
  • EPS 3.65
  • Cash ROIC 18.19%
  • Cash Ratio 0.41
  • Dividend 0 / 0%
  • Avg. Vol. 2.81M
  • Shares 236.71M
  • Market Cap. 18.53B

Company Description

Dollar Tree, Inc. operates discount variety stores in the United States. Its stores offer merchandise at the fixed price of $1.00. The company operates stores under the names of Dollar Tree, Deal$, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, basic health, and beauty care; household consumables, such as paper, plastics, and household chemicals, as well as fr... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Dollar Tree Stores Looks Overextended Here
Seeking Alpha - May 26, 2017
Retail has been in the doghouse recently, so its interesting to see Dollar Tree Stores (NASDAQ:DLTR) rally after posting mediocre results and delivering a bland guide.
Avoid Dollar Tree, Inc. (DLTR) Stock and Its So-So Prospects - Investorplace.com
Dollar Tree comparable sales miss on tax refund delays - Reuters
Can Dollar Tree, Inc. (DLTR) Stock Rise Above a Sinking Retail Sector?
Investorplace.com - May 23, 2017
Aside from short-term bursts, DLTR stock hasn't moved much since December of 2015. The exact same thing can be said about Dollar Tree rival Dollar General Corp. (NYSE:DG). That brings up an uncomfortable reality for Dollar Tree - it's not you, it's ...
Where Dollar Tree, Inc. (DLTR) is sitting on the technical charts? - USA Commerce Daily
Dollar Tree earnings meet expectations, tweaks full-year outlook
MarketWatch - May 25, 2017
Dollar Tree Inc. DLTR, -0.66% said Thursday it had net income of $200.5 million, or 85 cents a share, in its fiscal first quarter to April 29, down from $232.7 million, or 98 cents a share, in the year-earlier period.
Earnings Reaction History: Dollar Tree Inc., 60.0% Follow-Through Indicator, 5 ...
Nasdaq - May 25, 2017
Dollar Tree Inc. ( DLTR ) is due to issue its quarterly earnings report in the upcoming extended-hours session. Given its history, traders can expect very active trading in the issue immediately following its quarterly earnings announcement.
Dollar Tree Inc. Reveals 14% Retreat In Q1 Bottom Line
Nasdaq - May 25, 2017
(RTTNews.com) - Dollar Tree Inc. ( DLTR ) reported earnings for first quarter that lost ground compared to the same period last year.
Weitz Funds' Analyst Corner: A Perspective on Dollar Tree Inc.
GuruFocus.com - May 18, 2017
Dollar Tree (NASDAQ:DLTR) operates a network of approximately 14,400 discount variety stores across the United States and Canada under the Dollar Tree, Dollar Tree Canada and Family Dollar brands. During the summer of 2015, Dollar Tree completed a ...
Dollar Tree, Inc. (DLTR) Receives $88.26 Consensus Target Price from Brokerages
The Cerbat Gem - 4 hours ago
Dollar Tree logo Shares of Dollar Tree, Inc. (NASDAQ:DLTR) have earned an average recommendation of “Hold” from the twenty-four research firms that are currently covering the company, Marketbeat.
Dollar Tree, Inc. (DLTR) Position Lowered by Pitcairn Co - AppsforPCdaily
The Dollar Tree, Inc. (DLTR) Updates Q2 Earnings Guidance - Normangee Star
Can Dollar Tree (DLTR) Spring a Surprise in Q1 Earnings?
Nasdaq - May 23, 2017
Dollar Tree, Inc. DLTR is slated to release first-quarter fiscal 2017 results on May 25. The question lingering in investors' minds is whether this departmental store retailer will be able to deliver a positive earnings surprise in the quarter to be ...
Wallace Weitz Buys Dollar Tree Inc, Guidewire Software Inc, Compass Minerals ...
GuruFocus.com - May 15, 2017
Investment company Wallace Weitz buys Dollar Tree Inc, Guidewire Software Inc, Compass Minerals International Inc, Donnelley Financial Solutions Inc, American Tower Corp, Zoe's Kitchen Inc, Dollar General Corp, iShares Russell 1000, sells TransDigm ...
Analyst Observation On 2 Stocks: MacroGenics, Inc. (MGNX), Dollar Tree, Inc ...
Post Analyst - 2 hours ago
MacroGenics, Inc. (MGNX) has made its way to a 12-month decline of -23.8%. Turning to Dollar Tree, Inc. (NASDAQ:DLTR), its shares were trading at $78.28 a retreat of $-0.52, on the trading floor.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for DLTR to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate DLTR's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$78.28 Current Price

$73.81 Growth Price (DCF)

Overvalued by 5.71%


Growth Rate Assumed by Market: 15.15%


Future Free Cash Flow Growth Rate: 13.1%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$39.63 Stability Price (EPV)

Overvalued by 49.37%


Discount Rate: 15.0%

$133.36 Book Price

Undervalued by 70.37%


Excellent Cash Return on Invested Capital over the past 5 years

DLTR has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. Annual Reports can be useful in identifying the cause of one-time events and future sustainability.

DLTR has created $18.19 of cash for every $100 invested.
Figures in USD. Fiscal year ends in January
20132014201520162017
Free Cash Flow 365.50M 463.00M 601.20M 300.40M 1.11B
divided by
Invested Capital 1.68B 1.82B 1.84B 13.07B 12.73B
Cash ROIC 21.81% 25.47% 32.65% 2.30% 8.70%

Excellent Return on Equity over the past 5 years

Over the past 5 years, DLTR has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

DLTR has generated $28.94 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in January
20132014201520162017
Net Income 619.30M 596.70M 599.20M 282.40M 896.20M
divided by
Stockholders' Equity 1.67B 1.17B 1.79B 4.41B 5.39B
Return on Equity 37.14% 50.97% 33.57% 6.41% 16.63%

Excellent Business Performance over the past 10 years

DLTR has been able to maintain profitability in good times and bad. This could mean DLTR has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

DLTR has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in January
2008200920102011201220132014201520162017
Free Cash Flow 171.70M 271.80M 416.20M 340.00M 436.40M 365.50M 463.00M 601.20M 300.40M 1.11B

Weak Balance Sheet

DLTR's financial position is not ideal. The key is to check whether DLTR is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in January
2008200920102011201220132014201520162017
Cash 81.10M 364.40M 599.40M 486.00M 288.30M 399.90M 267.70M 864.10M 740.10M 870.40M
Current Assets 788.80M 1.07B 1.31B 1.33B 1.21B 1.47B 1.38B 1.99B 3.94B 3.94B
Total Assets 1.79B 2.04B 2.29B 2.38B 2.33B 2.75B 2.77B 3.57B 15.90B 15.70B
Current Liabilities 405.90M 409.90M 475.90M 532.80M 581.00M 676.20M 686.30M 861.60M 2.10B 2.11B
Total Liabilities 799.30M 782.50M 860.50M 921.50M 984.00M 1.08B 1.60B 1.78B 11.49B 10.31B
Stockholder' Equity 988.40M 1.25B 1.43B 1.46B 1.34B 1.67B 1.17B 1.79B 4.41B 5.39B
Current Ratio 1.94 2.62 2.74 2.50 2.08 2.18 2.01 2.31 1.88 1.87
TL-to-TA 0.45 0.38 0.38 0.39 0.42 0.39 0.58 0.50 0.72 0.66

Consistent Reinvestment of Profits over the past 10 years

DLTR has consistently retained profits. This may put DLTR in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, DLTR can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in January
2008200920102011201220132014201520162017
Retained Earnings 987.40M 1.22B 1.43B 1.46B 1.34B 1.67B 1.17B 1.77B 2.06B 2.95B
Retained Earnings Growth - 23.24% 17.57% 1.92% -7.82% 23.97% -29.50% 51.00% 15.92% 43.58%

Competitive Industry over the past 10 years

DLTR is likely operating in an industry with medium to low barriers to entry. This may mean that DLTR doesn't have a characteristic that's hard to replicate, such as exclusive distribution, branding or the ability to keep costs low. If Gross Margins are at least satisfactory, it's likely that DLTR invests heavily in R&D and Sales, General & Administrative expenses.

Only $5.90 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in January
2008200920102011201220132014201520162017
Net Income 201.30M 229.50M 320.50M 397.30M 488.30M 619.30M 596.70M 599.20M 282.40M 896.20M
divided by
Revenue 4.24B 4.64B 5.23B 5.88B 6.63B 7.39B 7.84B 8.60B 15.50B 20.72B
Net Profit Margin 4.74% 4.94% 6.13% 6.75% 7.36% 8.38% 7.61% 6.97% 1.82% 4.33%

Varying Pricing Power over the past 10 years

DLTR has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. However, there is a substantial variation in their Gross Profit Margins from year-to-year, which indicates inconsistent performance. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$40.73 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in January
2008200920102011201220132014201520162017
Gross Profit 1.46B 1.59B 1.86B 2.09B 6.63B 2.65B 2.79B 3.03B 4.66B 6.39B
divided by
Revenue 4.24B 4.64B 5.23B 5.88B 6.63B 7.39B 7.84B 8.60B 15.50B 20.72B
Gross Margin 34.44% 34.28% 35.49% 35.49% 100.00% 35.87% 35.58% 35.27% 30.05% 30.86%

High Capital Intensity over the past 10 years

DLTR spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

69.54% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in January
2008200920102011201220132014201520162017
Capital Expenditure 195.60M 131.30M 164.80M 178.70M 250.10M 312.20M 330.40M 325.60M 480.50M 565.60M
divided by
Net Income 201.30M 229.50M 320.50M 397.30M 488.30M 619.30M 596.70M 599.20M 282.40M 896.20M
Capital Expenditure Ratio 97.17% 57.21% 51.42% 44.98% 51.22% 50.41% 55.37% 54.34% 170.15% 63.11%

No Dividend History over the past 10 years

DLTR has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in January
2008200920102011201220132014201520162017
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 144.60M 136.20M 135.00M 128.00M 121.20M 230.70M 219.10M 207.00M 223.50M 236.80M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 27.22 32.45 56.39 83.11 39.60 56.35 70.70 77.62 77.18 81.29
Dividend Yield - - - - - - - - - -

Strong History of Stock Buybacks over the past 10 years

DLTR has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in January
2008200920102011201220132014201520162017
Shares Outstanding 144.60M 136.20M 135.00M 128.00M 121.20M 230.70M 219.10M 207.00M 223.50M 236.80M
Stock Bought Back - 6.17% 0.89% 5.47% 5.61% -47.46% 5.29% 5.85% -7.38% -5.62%
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