Are Dollar Tree, Inc. (DLTR) stocks overvalued or undervalued?
Dollar Tree, Inc. (DLTR) receives a solid 83 valuation rating from InvestorsObserver data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings and growth rate. DLTR is better valued than 83% of stocks based on these valuation analyses. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.
DLTR has a year-over-year price-earnings (PE) ratio of 23.4, which puts it above the historical average of around 15. DLTR is currently trading at a poor value due to investors paying more than the stock is worth relative to its earnings. . DLTR’s trailing 12-month earnings per share (EPS) of 5.79 doesn’t justify its stock price in the market. Rolling PE ratios do not take into account the company’s projected growth rate, thus some companies will have high PE ratios due to high growth attracting more investors even if the underlying company generated low profits so far. DLTR currently has a 12-month PE to Growth (PEG) ratio of 1.27. The market is currently overvaluing DLTR relative to its expected growth due to the PEG ratio being above the fair market value of 1. DLTR’s PEG arises from its forward price to earnings ratio being divided by its growth. Because PEG ratios include more fundamentals of a company’s overall health with an added focus on the future, they are one of the most widely used valuation measures by analysts.
DLTR’s valuation metrics are low at its current price due to an overvalued PEG ratio despite strong growth. DLTR’s PE and PEG are below the market average, resulting in a below-average valuation score. Click here for the full Dollar Tree, Inc. (DLTR) stock report.
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