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Dollar Tree (DLTR) Gains But Lags Market: What You Should Know

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Dollar Tree (DLTR) closed the most recent trading day at $170.21, moving +0.42% from the previous trading session. The stock lagged the S&P 500's daily gain of 2.76%. At the same time, the Dow added 2.43%, and the tech-heavy Nasdaq gained 0.25%.

Coming into today, shares of the discount retailer had gained 12.93% in the past month. In that same time, the Retail-Wholesale sector gained 6.16%, while the S&P 500 gained 4.44%.

Wall Street will be looking for positivity from Dollar Tree as it approaches its next earnings report date. On that day, Dollar Tree is projected to report earnings of $1.57 per share, which would represent year-over-year growth of 27.64%. Meanwhile, our latest consensus estimate is calling for revenue of $6.77 billion, up 6.8% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.15 per share and revenue of $28.08 billion. These totals would mark changes of +40.52% and +6.69%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Dollar Tree. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.09% higher. Dollar Tree is holding a Zacks Rank of #1 (Strong Buy) right now.

Investors should also note Dollar Tree's current valuation metrics, including its Forward P/E ratio of 20.8. Its industry sports an average Forward P/E of 20.8, so we one might conclude that Dollar Tree is trading at a no noticeable deviation comparatively.

It is also worth noting that DLTR currently has a PEG ratio of 1.34. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Retail - Discount Stores industry currently had an average PEG ratio of 1.75 as of yesterday's close.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 200, which puts it in the bottom 21% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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