The stock is gaining today by 1.21% to $75.89.
Analysts cited the company's strong first quarter 2015 earnings. The company yesterday reported revenue of $4.9 billion, or 84 cents per share, compared to revenue of $4.5 billion, or $1.01 per share, in the same quarter last year.
Overall, the discount retailer exceeded BMO Capital Markets analysts' consensus estimates of 81 cents per share for the quarter.
Additionally, "Gross margin rate improved primarily on higher initial merchandise markups and management's continued effective focus on inventory shrink rate, combined with lower transportation costs," analysts said.
Last week, the company also announced that Todd Vasos would be the next CEO of the company.
TheStreet Ratings team rates DOLLAR GENERAL CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate DOLLAR GENERAL CORP (DG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, increase in net income and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- DG's revenue growth has slightly outpaced the industry average of 2.1%. Since the same quarter one year prior, revenues slightly increased by 9.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 33.90% over the past year, a rise that has exceeded that of the S&P 500 Index. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- DOLLAR GENERAL CORP has improved earnings per share by 15.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DOLLAR GENERAL CORP increased its bottom line by earning $3.50 versus $3.17 in the prior year. This year, the market expects an improvement in earnings ($3.95 versus $3.50).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Multiline Retail industry average. The net income increased by 10.3% when compared to the same quarter one year prior, going from $322.17 million to $355.37 million.
- Net operating cash flow has slightly increased to $474.20 million or 4.79% when compared to the same quarter last year. Despite an increase in cash flow of 4.79%, DOLLAR GENERAL CORP is still growing at a significantly lower rate than the industry average of 105.04%.
- You can view the full analysis from the report here: DG Ratings Report