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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 at $158.21 in the latest trading session, marking a -1.06% move from the prior day. This move lagged the S&P 500's daily gain of 0.37%. At the same time, the Dow added 0.42%, and the tech-heavy Nasdaq gained 0.56%.

Prior to today's trading, shares of the discount retailer had gained 1.86% over the past month. This has lagged the Retail-Wholesale sector's gain of 2.79% and the S&P 500's gain of 4.42% in that time.

Investors will be hoping for strength from DG as it approaches its next earnings release. In that report, analysts expect DG to post earnings of $1.38 per share. This would mark year-over-year growth of 9.52%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.91 billion, up 7.73% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.61 per share and revenue of $27.66 billion. These totals would mark changes of +10.72% and +7.92%, respectively, from last year.

Any recent changes to analyst estimates for DG should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.09% higher. DG currently has a Zacks Rank of #2 (Buy).

Investors should also note DG's current valuation metrics, including its Forward P/E ratio of 24.19. For comparison, its industry has an average Forward P/E of 23.21, which means DG is trading at a premium to the group.

Investors should also note that DG has a PEG ratio of 2.37 right now. 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. Retail - Discount Stores stocks are, on average, holding a PEG ratio of 2.36 based on yesterday's closing prices.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 30, putting it in the top 12% 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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