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Here's Why Dollar Tree (DLTR) Fell More Than Broader Market

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The most recent trading session ended with Dollar Tree (DLTR - Free Report) standing at $63.31, reflecting a -1.84% shift from the previouse trading day's closing. The stock's performance was behind the S&P 500's daily loss of 0.33%. On the other hand, the Dow registered a loss of 0.22%, and the technology-centric Nasdaq decreased by 0.56%.

Coming into today, shares of the discount retailer had lost 8.43% in the past month. In that same time, the Retail-Wholesale sector lost 0.22%, while the S&P 500 gained 1.83%.

The investment community will be paying close attention to the earnings performance of Dollar Tree in its upcoming release. In that report, analysts expect Dollar Tree to post earnings of $1.06 per share. This would mark year-over-year growth of 9.28%. In the meantime, our current consensus estimate forecasts the revenue to be $7.45 billion, indicating a 1.88% growth compared to the corresponding quarter of the prior year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $5.33 per share and a revenue of $30.71 billion, representing changes of -9.51% and +0.34%, respectively, from the prior year.

Any recent changes to analyst estimates for Dollar Tree should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. As of now, Dollar Tree holds a Zacks Rank of #5 (Strong Sell).

From a valuation perspective, Dollar Tree is currently exchanging hands at a Forward P/E ratio of 12.1. This indicates a discount in contrast to its industry's Forward P/E of 19.73.

We can additionally observe that DLTR currently boasts a PEG ratio of 2.73. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Retail - Discount Stores industry currently had an average PEG ratio of 2.33 as of yesterday's close.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 74, which puts it in the top 30% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow DLTR in the coming trading sessions, be sure to utilize Zacks.com.


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