Has Dollar General (DG) Run Too Far After Its 1 Year Share Price Surge

Simply Wall St.13:29

If you are wondering whether Dollar General's current share price offers value, you are not alone. Many investors are asking the same question as the stock sits under fresh scrutiny. The shares most ...

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Many investors are asking the same question as the stock sits under fresh scrutiny. The shares most ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/consumer-retailing/nyse-dg/dollar-general/news/has-dollar-general-dg-run-too-far-after-its-1-year-share-pri\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"DG","symbol_name":"美国达乐公司","start_time":0,"source_url":"https://simplywall.st/stocks/us/consumer-retailing/nyse-dg/dollar-general/news/has-dollar-general-dg-run-too-far-after-its-1-year-share-pri","article_id":"2614772462","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/4432000-choice1-main-header/1585186862198"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/us/consumer-retailing/nyse-dg/dollar-general/news/has-dollar-general-dg-run-too-far-after-its-1-year-share-pri","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2614772462","pubTimestamp":1771997377,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"If you are wondering whether Dollar General's current share price offers value, you are not alone. Many investors are asking the same question as the stock sits under fresh scrutiny.\nThe shares most recently closed at US$153.96, with returns of 2.9% over 7 days, 4.8% over 30 days, 12.5% year to date, a 100.2% return over 1 year, but declines of 24.3% over 3 years and 10.7% over 5 years.\nThese mixed returns have put the company back on many watchlists, as investors try to make sense of the...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"DG":"美国达乐公司","DCF":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc","BK4588":"碎股","LU0162691827.USD":"BGF US BASIC VALUE \"A4\" INC","BK4114":"综合货品商店","BK4585":"ETF&股票定投概念","BK4504":"桥水持仓","LU1430594728.SGD":"Eastspring Investments - Global Low Volatility Equity AS SGD","LU1989763690.USD":"东方汇理世代食品基金A2 Acc","LU1989763427.SGD":"CPR Invest - Food For Generations A2 Acc SGD-H","BK4155":"大卖场与超市","LU0320765489.SGD":"FTIF - Franklin Mutual US Value A Acc SGD","LU0208291251.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) INC","LU0072461881.USD":"BGF US BASIC VALUE \"A2\" ACC","LU1585245621.USD":"EASTSPRING INV GLOBAL LOW VOLATILITY EQUITY FUND \"A\" (USD) ACC B","LU0070302665.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) ACC"},"translate_title":"Dollar General(DG)股价飙升一年后是否走得太远了","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DG":1.5,"DCF":1},"content_text":"If you are wondering whether Dollar General's current share price offers value, you are not alone. Many investors are asking the same question as the stock sits under fresh scrutiny. The shares most recently closed at US$153.96, with returns of 2.9% over 7 days, 4.8% over 30 days, 12.5% year to date, a 100.2% return over 1 year, but declines of 24.3% over 3 years and 10.7% over 5 years. These mixed returns have put the company back on many watchlists, as investors try to make sense of the sharp 1 year move against weaker 3 and 5 year figures. While there is no single headline event driving this pattern in the information provided here, it does set the stage for a closer look at what the market might be pricing in. On our valuation checks, Dollar General scores just 1 out of 6. The key question is how different valuation methods judge that score and whether there is an even more complete way to think about value that we will come to at the end of this article.  Dollar General scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown. AdvertisementApproach 1: Dollar General Discounted Cash Flow (DCF) Analysis A Discounted Cash Flow model projects a company’s future cash flows and then discounts them back to today’s value, aiming to estimate what the whole business might be worth right now. For Dollar General, the DCF used here is a 2 Stage Free Cash Flow to Equity model based on cash flow projections. The company’s last twelve month free cash flow is about $2.06b. Analyst inputs and extrapolated estimates suggest free cash flow of $1.89b by 2030, with a series of annual projections between 2026 and 2035 that are discounted back to today to account for risk and the time value of money. Pulling these cash flows together, the model arrives at an estimated intrinsic value of US$178.13 per share. Compared with the recent share price of US$153.96, this implies the stock is around 13.6% undervalued based on the DCF output. Result: UNDERVALUED Our Discounted Cash Flow (DCF) analysis suggests Dollar General is undervalued by 13.6%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks. DG Discounted Cash Flow as at Feb 2026 Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Dollar General. Approach 2: Dollar General Price vs Earnings For a profitable company like Dollar General, the P/E ratio is a useful shorthand for how much investors are currently willing to pay for each dollar of earnings. It ties the share price directly to the bottom line, which is often what drives long term returns. What counts as a “normal” P/E depends on how the market views a company’s growth prospects and risk. Higher expected growth or lower perceived risk can support a higher multiple, while slower growth or higher risk usually points to a lower one. Dollar General currently trades on a P/E of 26.53x. That sits above the Consumer Retailing industry average of 22.51x and above the peer group average of 22.89x. Simply Wall St’s Fair Ratio for Dollar General is 23.35x, which is its proprietary view of what a reasonable P/E might be given factors like earnings growth, profit margins, industry, market cap and risk profile. The Fair Ratio is more tailored than a simple peer or industry comparison because it adjusts for company specific characteristics rather than assuming all retailers deserve the same multiple. Comparing the current 26.53x P/E with the 23.35x Fair Ratio suggests the shares are pricing in more optimism than this framework implies. Result: OVERVALUED NYSE:DG P/E Ratio as at Feb 2026 P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 22 top founder-led companies. Upgrade Your Decision Making: Choose your Dollar General Narrative Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple tool on Simply Wall St’s Community page that lets you attach your own story about Dollar General to a financial forecast and fair value. You can compare that fair value with the current share price to guide potential buy or sell decisions, and then see it update automatically when new news or earnings arrive. For example, one investor might build a cautious Dollar General Narrative anchored around a fair value near US$93.54, while another might build a more optimistic one closer to US$164.66, both using the same company but very different assumptions about future revenue, margins and P/E multiples. For Dollar General, however, we will make it really easy for you with previews of two leading Dollar General Narratives: 🐂 Dollar General Bull Case Fair value in this bullish narrative: US$164.66 per share Implied discount to this fair value at the recent US$153.96 share price: about 6.5% undervalued Assumed revenue growth in this scenario: 4.88% a year  Focus is on higher future earnings power as net and operating margins improve through portfolio optimisation, inventory and SKU clean up, and projects like Elevate and remodel programs. Growth in pOpshelf, better in store experience, and digital initiatives such as expanded delivery and DG Media Network are expected to support sales and higher margin revenue. Risks include pressure on core customers, store closures, a heavier cost base, and a heavier tilt to consumables, but the narrative assumes these are managed well enough for earnings and margins to improve.  🐻 Dollar General Bear Case Fair value in this bearish narrative: US$103.80 per share Implied premium to this fair value at the recent US$153.96 share price: about 48.7% overvalued Assumed revenue growth in this scenario: 4.35% a year  This view accepts some earnings improvement but expects the P/E multiple to settle closer to 16.76x, which is below recent levels, as store closures, slower traffic and cost pressure weigh on sentiment. Closures of underperforming stores, tariff sensitivity and higher SG&A are front and center, with concern that price increases for value focused customers could keep net margins under pressure. Even with remodels, digital efforts and non consumable initiatives, the cautious stance is that the current share price already assumes too much, leaving limited room if these projects under deliver.  These two Narratives bracket a wide range of possible outcomes. The key step for you is to decide which set of assumptions feels closer to your own view of Dollar General's earnings power, margin profile and appropriate P/E over the next few years. Curious how numbers become stories that shape markets? Explore Community Narratives Do you think there's more to the story for Dollar General? Head over to our Community to see what others are saying! NYSE:DG 1-Year Stock Price Chart  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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