The latest trading session saw Dollar Tree (DLTR) ending at $75.62, denoting a +1.48% adjustment from its last day's close. The stock outperformed the S&P 500, which registered a daily gain of 0.24%. Elsewhere, the Dow gained 0.16%, while the tech-heavy Nasdaq added 0.08%.
Coming into today, shares of the discount retailer had gained 1.03% in the past month. In that same time, the Retail-Wholesale sector gained 5.98%, while the S&P 500 gained 2.37%.
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 $2.18 per share. This would mark a year-over-year decline of 14.51%. Simultaneously, our latest consensus estimate expects the revenue to be $8.24 billion, showing a 4.61% drop compared to the year-ago quarter.
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.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. At present, Dollar Tree boasts a Zacks Rank of #2 (Buy).
Looking at valuation, Dollar Tree is presently trading at a Forward P/E ratio of 12.3. This signifies a discount in comparison to the average Forward P/E of 19.02 for its industry.
We can additionally observe that DLTR currently boasts a PEG ratio of 2.11. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Retail - Discount Stores industry currently had an average PEG ratio of 2.08 as of yesterday's close.
The Retail - Discount Stores industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 31, this industry ranks in the top 13% of all industries, numbering over 250.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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