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Dollar General (DG) Stock Slides as Market Rises: Facts to Know Before You Trade

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The latest trading session saw Dollar General (DG - Free Report) ending at $116.54, denoting a -0.11% adjustment from its last day's close. This move lagged the S&P 500's daily gain of 0.73%. At the same time, the Dow added 0.62%, and the tech-heavy Nasdaq gained 0.93%.

Shares of the discount retailer witnessed a gain of 8.17% over the previous month, beating the performance of the Retail-Wholesale sector with its loss of 3.41% and the S&P 500's loss of 2.29%.

Investors will be eagerly watching for the performance of Dollar General in its upcoming earnings disclosure. The company is expected to report EPS of $1.28, down 45.06% from the prior-year quarter. Meanwhile, the latest consensus estimate predicts the revenue to be $9.7 billion, indicating a 2.45% increase compared to the same quarter of the previous year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $7.64 per share and revenue of $38.73 billion, which would represent changes of -28.46% and +2.33%, respectively, from the prior year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Dollar General. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 4.05% lower. As of now, Dollar General holds a Zacks Rank of #5 (Strong Sell).

In the context of valuation, Dollar General is at present trading with a Forward P/E ratio of 15.27. This valuation marks a discount compared to its industry's average Forward P/E of 20.59.

Meanwhile, DG's PEG ratio is currently 2.11. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. By the end of yesterday's trading, the Retail - Discount Stores industry had an average PEG ratio of 2.11.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 162, finds itself in the bottom 36% echelons of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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