What Is Dollar Tree, Inc.'s (NASDAQ:DLTR) Share Price Doing?

Let's talk about the popular Dollar Tree, Inc. (NASDAQ:DLTR). The company's shares saw a decent share price growth of 18% on the NASDAQGS over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine Dollar Tree’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Dollar Tree

What Is Dollar Tree Worth?

According to our valuation model, Dollar Tree seems to be fairly priced at around 9.3% below our intrinsic value, which means if you buy Dollar Tree today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $79.92, then there’s not much of an upside to gain from mispricing. Furthermore, Dollar Tree’s low beta implies that the stock is less volatile than the wider market.

What does the future of Dollar Tree look like?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Dollar Tree, it is expected to deliver a relatively unexciting top-line growth of 9.3% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? DLTR’s future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on DLTR, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

It can be quite valuable to consider what analysts expect for Dollar Tree from their most recent forecasts. At Simply Wall St, we have the analysts estimates which you can view by clicking here.

If you are no longer interested in Dollar Tree, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.