Should I buy Dollar Tree stock?
Dollar Tree, formerly known as Only $1.00, is an American multi-price-point chain of discount variety stores. Headquartered in Chesapeake, Virginia, it is a Fortune 500 company and operates 15,115 stores throughout the 48 contiguous U.S. states and Canada. The company provides low-cost products to to consumers in small-town America by offering a dollar store shopping experience with selective name brands, private label products and everyday prices. Additionally, the company operates stores under the name of Dollar Bills, as well as a multi-price-point variety chain under the Family Dollar banner.
Should I buy Dollar Tree stock?
Like other retail stores, Dollar Tree has been affected by the cyclical nature of the shipping and logistics industry. Higher freight costs have been an issue due to effects from the COVID-19 pandemic. However, Dollar Tree has been able to manage these issues with price increases. During a recession more people will visit their stores. The company's performance based-off both short and long term indicators is better than 75% of the overall market.
When looking at the last two reports, this discount retailer has recorded a strong streak of surpassing earnings estimates. For the last reported quarter, Dollar Tree was expected to post earnings of $0.95 per share and it came out with earnings of $0.96 per share. For the previous quarter, the company was expected to post earnings of $1.03 per share and it actually produced earnings of $1.23 per share.
Dollar Tree currently has an Earnings ESP of +1.07%, which suggests that analysts have recently become bullish on the company's earnings prospects. Additionally, Dollar Tree has a PE ratio of 24.04 while the PE for the S&P 500 stands at about 24.32 and the industry’s PE ratio at 28.49. This indicates that the stock is relatively undervalued right now, compared to its peers.
If you decide to invest in Dollar Tree, stay focused on the long term for this highly profitable niche in the retail shopping universe.
Is Dollar Tree a buy right now?
Based on 17 analysts offering recommendations for DLTR in the last 3 months, the overall consensus is Moderate Buy. There are currently 1 (6%) sell rating, 7 (41%) hold ratings and 9 (53%) buy ratings for the stock. On average, Wall Street analysts predict that Dollar Tree's share price could reach $155.41 in the next twelve months, with a high estimate of $175 and a low estimate of $108. The median estimate represents a +8.8% increase from the current price of $142.84.
How do I purchase Dollar Tree stock?
If you’d like to buy Dollar Tree stock, you’ll need to find an online broker that gives you the ability to purchase the stock through the NASDAQ stock market exchange. Popular online brokerages with access to the U.S. stock market include WeBull, Vanguard Brokerage Services, TD Ameritrade, E*TRADE, Robinhood, Fidelity, and Charles Schwab.
