Dollar General (DG): Revisiting Valuation After Upgraded Sales Outlook and Store Remodel Acceleration

Dollar General (DG) recently increased its 2025 net sales growth guidance, which comes as the company wraps up an extensive round of store remodels through Project Elevate and Project Renovate. Management’s decision highlights renewed confidence in comparable sales and long-term growth.

See our latest analysis for Dollar General.

Momentum appears to be building for Dollar General, especially after it ramped up remodels and boosted its sales outlook. These types of moves tend to shift investor sentiment. While the 1-year total shareholder return is nearly flat, recent upgrades and ongoing community initiatives suggest a renewed sense of optimism for both the near and long term.

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Given this renewed momentum and Dollar General's improved outlook, the critical question is whether its stock is still trading at a discount or if the recent optimism has already been fully priced in by the market.

Most Popular Narrative: 16.6% Undervalued

Dollar General's most widely followed valuation narrative sets its fair value at $120.11, compared to the latest closing price of $100.21. This perspective brings recent optimism into sharp relief and asks whether the market is missing something bigger.

Ongoing investment in supply chain technology and logistics (including enhanced distribution, inventory management, and automation) is expected to further reduce inventory shrink and damages, directly supporting higher net margins in future quarters. Rapid scaling of digital initiatives, including same-day delivery partnerships (DoorDash, Uber Eats), in-house DG delivery, and the DG Media Network, positions Dollar General to capture incremental market share and drive higher-margin omni-channel revenue streams, boosting both sales and earnings over the long term.

Read the complete narrative.

Wondering what’s fueling this bullish forecast? The narrative is betting big on operational upgrades and a revamped business model, with several moving parts driving expectations higher. Curious which bold financial projections underpin that fair value target? Discover the drivers, the growth story, and a few surprises by exploring the full breakdown.

Result: Fair Value of $120.11 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent competition and rising labor costs could still pressure Dollar General’s margins and growth, making the bullish case less certain.

Find out about the key risks to this Dollar General narrative.

Build Your Own Dollar General Narrative

If you’re not fully convinced by the popular view or simply prefer digging into the data on your own terms, you can craft a personal narrative in just a few minutes with Do it your way.

A great starting point for your Dollar General research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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