Dollar Tree Inc

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DLTR : NASDAQ : Services
$87.71 up 1.1 | 1.3%
Today's Range: 86.05 - 88.509
Avg. Daily Volume: 2874600.0
12/02/16 - 3:59 PM ET

Financial Analysis


DOLLAR TREE INC's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. DOLLAR TREE INC has very weak liquidity. Currently, the Quick Ratio is 0.35 which clearly shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 21.86% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)5001.64945.3
EBITDA ($mil)500.0511.4
EBIT ($mil)342.4299.5
Net Income ($mil)171.681.9


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)737.81110.9
Total Assets ($mil)16195.016699.0
Total Debt ($mil)7083.88343.5
Equity ($mil)5047.74142.2


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin33.5533.63
EBITDA Margin9.9910.34
Operating Margin6.856.06
Sales Turnover1.260.76
Return on Assets4.961.55
Return on Equity15.916.27
Debt Q3 FY16 Q3 FY15
Current Ratio2.032.14
Debt/Capital0.580.67
Interest Expense112.198.4
Interest Coverage3.053.04


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)235.7234.8
Div / share0.00.0
EPS0.720.35
Book value / share21.4217.64
Institutional Own % n/a n/a
Avg Daily Volume3145293.01952148.0

Valuation


BUY. The current P/E ratio indicates a premium compared to an average of 20.06 for the Multiline Retail industry and a value on par with the S&P 500 average of 25.35. To use another comparison, its price-to-book ratio of 4.14 indicates a premium versus the S&P 500 average of 2.81 and a discount versus the industry average of 4.32. The current price-to-sales ratio is well below the S&P 500 average, but above the industry average. The valuation analysis reveals that, DOLLAR TREE INC seems to be trading at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
DLTR 26.16 Peers 20.06   DLTR 14.03 Peers 10.02

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

DLTR is trading at a significant premium to its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

DLTR is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
DLTR 19.55 Peers 19.28   DLTR 0.13 Peers 1.59

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

DLTR is trading at a premium to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

DLTR trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
DLTR 4.14 Peers 4.32   DLTR 175.60 Peers 36.46

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

DLTR is trading at a valuation on par with its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

DLTR is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
DLTR 1.02 Peers 0.75   DLTR 62.18 Peers 13.95

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

DLTR is trading at a significant premium to its industry.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

DLTR has a sales growth rate that significantly exceeds its peers.

 

 

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