Discount Stores · NASDAQ
Current Price
$95.70
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Dollar Tree, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Dollar Tree, Inc. operates discount variety retail stores. It operates in two segments, Dollar Tree and Family Dollar. The Dollar Tree segment offers merchandise at the fixed price of $ 1.25. It provides consumable merchandise, including candy and food, and health and personal care, as well as everyday consumables, such as household paper and chemicals, and frozen and refrigerated food; variety merchandise comprising toys, durable housewares, gifts, stationery, party goods, greeting cards, softlines, arts and crafts supplies, and other items; and seasonal goods that include Christmas, Easter, Halloween, and Valentine's Day merchandise. As of January 29, 2022, this segment operated 8,061 stores under the Dollar Tree and Dollar Tree Canada brands, as well as 15 distribution centers in the United States and 2 distribution centers in Canada. The Family Dollar segment operates general merchandise retail discount stores that offer consumable merchandise, which comprise food and beverages, tobacco, health and personal care, household chemicals, paper products, hardware and automotive supplies, diapers, batteries, and pet food and supplies; and home products, including housewares, home décor, and giftware, as well as domestics, such as comforters, sheets, and towels. It also provides apparel and accessories merchandise comprising clothing, fashion accessories, and shoes; and seasonal and electronics merchandise that include Christmas, Easter, Halloween, and Valentine's Day merchandise, as well as personal electronics, which comprise pre-paid cellular phones and services, stationery and school supplies, and toys. As of January 29, 2022, this segment operated 8,016 stores under the Family Dollar brand; and 11 distribution centers. The company was founded in 1986 and is based in Chesapeake, Virginia.
ROIC (TTM)
10.7%
ROE (TTM)
34.8%
FCF Yield
7.42%
Based on trailing twelve-month data, DLTR shows a free cash flow per share of N/A and a ROIC of 10.7%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 7.42% are important context metrics when evaluating DLTR's stock valuation relative to peers.
The intrinsic value of DLTR depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether DLTR is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $95.70. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Dollar Tree, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Discount Stores industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting DLTR's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Dollar Tree, Inc., this means projecting how much free cash flow the Discount Stores will produce over the next 5-10 years, then discounting those amounts to today's dollars. DLTR's ROIC of 10.7% shows moderate capital returns.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For DLTR, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
