Dollar Tree, Inc. (NASDAQ: DLTR)

Sector: Consumer Defensive Industry: Discount Stores CIK: 0000935703
Market Cap 27.88 Bn
P/B 8.05
P/E -9.55
P/S 1.47
ROIC (Qtr) 10.49
Div Yield % 0.00
Rev 1y % (Qtr) 9.44
Total Debt (Qtr) 7.66 Bn
Debt/Equity (Qtr) 2.21
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About

Dollar Tree, Inc., often recognized by its stock symbol DLTR, operates in the discount variety store industry. This company has established a strong presence in the market, managing over 15,000 stores across the United States and internationally. Dollar Tree's primary business segments are Dollar Tree and Family Dollar, each with unique offerings and target customer bases. The core of Dollar Tree's operations revolves around providing a wide range of products at a fixed price point of $1.25 or less. This pricing strategy attracts a broad customer...

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Investment thesis

Bull case

  • Operating cash flow of 2.38B provides strong 34.64x coverage of stock compensation 68.60M, indicating sustainable incentive practices.
  • Robust free cash flow of 1.61B exceeds capital expenditure of 764.30M by 2.11x, indicating strong organic growth funding capability.
  • Operating cash flow of 2.38B provides exceptional 26.40x coverage of interest expenses 90M, showing strong debt service capability.
  • Tangible assets of 13.23B provide robust 21.39x coverage of other current liabilities 618.60M, indicating strong asset backing.
  • Retained earnings of 3.52B provide strong 5.69x coverage of other current liabilities 618.60M, indicating earnings quality.

Bear case

  • Operating cash flow of 2.38B barely covers its investment activities of (809.10M), with a coverage ratio of -2.94, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 637.30M against inventory of 2.86B, the 0.22 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Cash reserves of 637.30M provide limited coverage of acquisition spending of 426M, which is 1.50x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of (2.45B) show weak coverage of depreciation charges of 267.80M, with a -9.15 ratio indicating high capital intensity and potential reinvestment needs.
  • High financing cash flow of (1.70B) relative to working capital of (159.30M), which is 10.68x suggests concerning dependence on external funding for operational needs.

Segments Breakdown of Revenue (2025)

Product and Service Breakdown of Revenue (2025)

Peer comparison

Companies in the Discount Stores
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 WMT Walmart Inc. 1,493.21 Bn 103.91 3.66 68.42 Bn
2 COST Costco Wholesale Corp /New 443.66 Bn 356.36 5.82 8.10 Bn
3 TGT Target Corp 61.67 Bn 21.00 0.82 20.04 Bn
4 DG Dollar General Corp 32.90 Bn 23.24 0.83 16.51 Bn
5 DLTR Dollar Tree, Inc. 27.88 Bn -9.55 1.47 7.66 Bn
6 BJ BJ's Wholesale Club Holdings, Inc. 13.09 Bn 22.76 0.62 2.70 Bn
7 OLLI Ollie's Bargain Outlet Holdings, Inc. 6.85 Bn 30.61 2.70 0.67 Bn
8 PSMT Pricesmart Inc 4.69 Bn 31.14 0.87 0.33 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.52 2.61
EV to Cash from Ops. EV/CFO 14.51 36.59
EV to Debt EV to Debt 4.50 13.49
EV to EBIT EV/EBIT -14.07 37.61
EV to EBITDA EV/EBITDA 19.27 35.41
EV to Free Cash Flow [EV/FCF] EV/FCF 21.39 66.89
EV to Market Cap EV to Market Cap 1.24 1.06
EV to Revenue EV/Rev 1.82 2.05
Price to Book Value [P/B] P/B 8.05 12.39
Price to Earnings [P/E] P/E -9.55 59.65
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 2,558.05
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 19.94
Dividend per Basic Share Div per Share (Qtr) 0.00 1.57
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 21.35
Interest Coverage Int. cover (Qtr) -27.22 12.56
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 13.05 -8.17
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 15.16 36.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -7.48
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -223.46 -44.54
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -1.53 0.21
EBIT Growth (1y) % EBIT 1y % (Qtr) -333.78 -49.73
EBT Growth (1y) % EBT 1y % (Qtr) -275.02 -68.31
EPS Growth (1y) % EPS 1y % (Qtr) -182.77 -17.04
FCF Growth (1y) % FCF 1y % (Qtr) -25.52 37.06
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 7.36 10.99
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.39 1.82
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.07
Cash Ratio Cash Ratio (Qtr) 0.16 0.20
Current Ratio Curr Ratio (Qtr) 0.96 1.14
Debt to Equity Ratio Debt/Equity (Qtr) 2.21 1.24
Interest Cover Ratio Int Coverage (Qtr) -27.22 12.56
Times Interest Earned Times Interest Earned (Qtr) -27.22 12.56
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -11.50 4.61
EBIT Margin % EBIT Margin % (Qtr) -12.92 0.99
EBT Margin % EBT Margin % (Qtr) -13.40 2.30
Gross Margin % Gross Margin % (Qtr) 35.90 24.97
Net Profit Margin % Net Margin % (Qtr) -15.40 1.03