Dollar Tree, Inc. (DLTR) Stock Valuation — PE Analysis
Discount Stores · NASDAQ
Current Price
$114.00
PE Ratio (TTM)
17.4x
Intrinsic Value
$122.76
+7.1% margin of safety
COMPETITIVE MOAT
↑Value Proposition Strength
Dollar Tree's consistent low-price strategy attracts a broad, price-sensitive customer base. This unwavering focus on affordability drives consistent traffic and sales, especially in challenging economic times.
↑Scale and Distribution Network
The company's extensive store footprint and efficient supply chain allow for significant purchasing power and cost advantages. This scale makes it difficult for smaller competitors to match their pricing and reach.
↑Multi-Price Point Strategy
The successful integration of higher price points alongside the $1.25 standard offers greater merchandising flexibility. This allows Dollar Tree to capture a wider range of consumer needs and increase average basket size.
INVESTMENT RISKS
↓Margin Pressure and Inflation
While execution is improving, ongoing inflationary pressures on goods and labor can still squeeze margins. Maintaining profitability while keeping prices low remains a constant challenge.
↓Competition in Discount Retail
The discount retail sector is highly competitive, with numerous players vying for the same value-conscious consumer. New entrants or aggressive strategies from rivals could erode market share.
↓Consumer Spending Sensitivity
While Dollar Tree benefits from economic downturns, significant shifts in consumer spending habits or a strong economic recovery could impact its core customer base's reliance on extreme value.
Base case
DLTR base case PE valuation
A base case PE valuation for DLTR estimates a fair value of about $122.76 per share, against a current price of $114. The model assumes 6.2% annual earnings growth, a 17x target PE multiple, and a 10% discount rate.
Intrinsic Value
$122.76
Margin of safety
+7.1%
Expected annual return
+1.5%
Base case assumptions: 6.2% annual earnings growth, 17x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the DLTR PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Dollar Tree, Inc. respond.
Open PE Calculator for DLTRCompany Overview
Dollar Tree, Inc. (DLTR) operates as a leading discount retailer, managing its extensive operations through two principal divisions: Dollar Tree and Family Dollar. The Dollar Tree segment distinguishes itself by offering all its merchandise at a consistent price of $1.25. Its product range is broad, encompassing essential consumables like confectionery, various food items, health and personal care products, household cleaning chemicals, paper goods, and frozen or refrigerated foods. Beyond these daily necessities, customers can find a diverse selection of general merchandise, including toys, resilient housewares, gifts, stationery, party essentials, greeting cards, softline apparel, and arts and crafts supplies. The segment also prominently features seasonal items for holidays such as Christmas, Easter, Halloween, and Valentine's Day. By January 29, 2022, this division maintained a substantial presence with 8,061 retail locations across its Dollar Tree and Dollar Tree Canada brands, supported by 15 distribution centers in the U.S. and an additional two in Canada. Conversely, the Family Dollar segment functions as a general merchandise discount chain with varying prices. Its inventory is comprehensive, covering a wide array of consumable goods such as groceries, beverages, tobacco, personal care and health products, household chemicals, paper products, hardware, automotive accessories, diapers, batteries, and pet food and supplies. Additionally, the segment provides home products, which include housewares, home décor, giftware, and domestics like bedding and towels. Shoppers can also find apparel and accessories, encompassing clothing, fashion items, and footwear. Seasonal and electronics merchandise, ranging from holiday-specific goods to pre-paid cellular phones and services, along with stationery, school supplies, and toys, are also key offerings. As of January 29, 2022, the Family Dollar brand operated 8,016 stores and was supported by 11 distribution centers. Founded in 1986, Dollar Tree, Inc. is headquartered in Chesapeake, Virginia.
Financial Metrics — DLTR PE Stock Valuation Data
PE Ratio (TTM)
17.4x
PEG Ratio
0.11
Earnings Yield
5.73%
ROE (TTM)
35.9%
Revenue/Share (TTM)
$100.35
Debt/Equity
1.33x
Frequently Asked Questions
What is the PE ratio of DLTR?
The trailing twelve-month PE ratio of DLTR reflects how much investors pay per dollar of Dollar Tree, Inc.'s earnings. This metric is most useful when compared to Discount Stores peers and the company's own historical range.
Is DLTR overvalued based on PE ratio?
DLTR's PE of 17.4x combined with a PEG ratio of 0.11 provides a growth-adjusted perspective. A PEG below 1.0 suggests DLTR may be undervalued relative to its earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Discount Stores, a DCF analysis may be more appropriate.
How do I value DLTR stock using PE ratio?
To value Dollar Tree, Inc. using PE: (1) Compare the current PE (17.4x) against the Discount Stores median to assess relative pricing, (2) check the PEG ratio (0.11) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of DLTR?
DLTR's PEG ratio is 0.11, calculated by dividing the PE ratio (17.4x) by the expected earnings growth rate. A PEG below 1.0 is traditionally considered a sign of undervaluation — the market may not be fully pricing in the growth potential. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for DLTR stock valuation?
PE ratio gives a quick relative read — how DLTR is priced versus Discount Stores peers. DCF provides an absolute value based on projected free cash flows. For DLTR, with a strong ROE of 35.9%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See DLTR DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Consumer Defensive valuationsP/E and DCF value DLTR with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.