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Dollar General (DG) Gains But Lags Market: What You Should Know
Dollar General (DG - Free Report) closed the most recent trading day at $210.46, moving +1.33% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.44%. At the same time, the Dow added 1.26%, and the tech-heavy Nasdaq gained 5.21%.
Coming into today, shares of the discount retailer had lost 3.95% in the past month. In that same time, the Retail-Wholesale sector gained 2.17%, while the S&P 500 gained 2.28%.
Dollar General will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.38, down 1.24% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $9.47 billion, up 8.21% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.19 per share and revenue of $40.03 billion. These totals would mark changes of +4.78% and +5.78%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Dollar General. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.52% lower. Dollar General is currently a Zacks Rank #4 (Sell).
Digging into valuation, Dollar General currently has a Forward P/E ratio of 18.56. Its industry sports an average Forward P/E of 21.41, so we one might conclude that Dollar General is trading at a discount comparatively.
Also, we should mention that DG has a PEG ratio of 1.75. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Discount Stores was holding an average PEG ratio of 1.99 at yesterday's closing price.
The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 184, which puts it in the bottom 27% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.