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Dollar General (DG) Stock Sinks As Market Gains: What You Should Know

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Dollar General (DG - Free Report) closed the most recent trading day at $107.60, moving -2.26% from the previous trading session. This change lagged the S&P 500's daily gain of 0.14%. Elsewhere, the Dow lost 0.04%, while the tech-heavy Nasdaq added 0.38%.

Coming into today, shares of the discount retailer had lost 1.27% in the past month. In that same time, the Retail-Wholesale sector gained 4.28%, while the S&P 500 gained 5.35%.

Investors will be eagerly watching for the performance of Dollar General in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $1.55, reflecting a 8.82% decrease from the same quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $10.67 billion, indicating a 4.52% increase compared to the same quarter of the previous year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $5.76 per share and revenue of $42.41 billion. These totals would mark changes of -2.7% and +4.42%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Dollar General. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. The Zacks Consensus EPS estimate has moved 0.09% lower within the past month. Dollar General is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Dollar General is currently trading at a Forward P/E ratio of 19.12. Its industry sports an average Forward P/E of 21.61, so one might conclude that Dollar General is trading at a discount comparatively.

It's also important to note that DG currently trades at a PEG ratio of 2.7. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Discount Stores industry currently had an average PEG ratio of 2.7 as of yesterday's close.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 189, placing it within the bottom 24% of over 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.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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