Dollar General (DG) Increases Yet Falls Behind Market: What Investors Need to Know

Zacks
01-31

The latest trading session saw Dollar General (DG) ending at $72.15, denoting a +0.15% adjustment from its last day's close. The stock's change was less than the S&P 500's daily gain of 0.53%. Meanwhile, the Dow experienced a rise of 0.38%, and the technology-dominated Nasdaq saw an increase of 0.25%.

The discount retailer's shares have seen a decrease of 4.99% over the last month, not keeping up with the Retail-Wholesale sector's gain of 5.57% and the S&P 500's gain of 1.24%.

Analysts and investors alike will be keeping a close eye on the performance of Dollar General in its upcoming earnings disclosure. The company is predicted to post an EPS of $1.50, indicating a 18.03% decline compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $10.26 billion, reflecting a 4.08% rise from the equivalent quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $5.75 per share and revenue of $40.57 billion, indicating changes of -23.84% and +4.84%, respectively, compared to the previous year.

Investors should also take note of any recent adjustments to analyst estimates for Dollar General. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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 0.04% higher within the past month. Right now, Dollar General possesses a Zacks Rank of #3 (Hold).

In the context of valuation, Dollar General is at present trading with a Forward P/E ratio of 12.52. This denotes a discount relative to the industry's average Forward P/E of 20.87.

It's also important to note that DG currently trades at a PEG ratio of 2.14. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DG's industry had an average PEG ratio of 2.36 as of yesterday's close.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 41, finds itself in the top 17% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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