CA$115 - That's What Analysts Think Dollarama Inc. (TSE:DOL) Is Worth After These Results

It's been a pretty great week for Dollarama Inc. (TSE:DOL) shareholders, with its shares surging 11% to CA$115 in the week since its latest yearly results. The result was positive overall - although revenues of CA$5.9b were in line with what the analysts predicted, Dollarama surprised by delivering a statutory profit of CA$3.56 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Dollarama after the latest results.

Check out our latest analysis for Dollarama

Taking into account the latest results, the consensus forecast from Dollarama's eleven analysts is for revenues of CA$6.35b in 2025. This reflects a meaningful 8.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 11% to CA$4.01. Before this earnings report, the analysts had been forecasting revenues of CA$6.30b and earnings per share (EPS) of CA$3.88 in 2025. So the consensus seems to have become somewhat more optimistic on Dollarama's earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 9.7% to CA$115. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Dollarama analyst has a price target of CA$125 per share, while the most pessimistic values it at CA$94.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Dollarama'shistorical trends, as the 8.2% annualised revenue growth to the end of 2025 is roughly in line with the 10% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 10% per year. So although Dollarama is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Dollarama following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Dollarama going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Dollarama that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.