DLTR
Dollar Tree, Inc.$115.79
Sell
Target $87.54
Report: Mar 10, 2026Consumer Defensive • Discount Stores • Turnaround CandidateSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$115.79-24.4%
Rec: SellConviction: Medium
Entry Target
N/A
N/A
Fair Value
$87.54
(24% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$142.40
52 Week Low$61.87
Avg. 3 Month Volume3.06M
Efficiency
LTM Gross Margin36.4%
LTM EBITDA Margin12.5%
LTM EBIT Margin9.1%
LTM Operating Margin8.5%
LTM ROA8.7%
LTM ROE34.8%
LTM ROIC10.9%
LTM ROCE17.7%
Capital Structure
Market Cap (MM)$21.6B
Enterprise Value (MM)$27.9B
Shares Outstanding198.90M
Total Debt (MM)$7.06B
Cash & Equivalents (MM)$760.70M
LTM Net Debt (MM)$6.29B
LTM Net Debt/EBITDA2.6x
Growth
TTM Rev. Growth-29.6%
Last 3-Yr Rev. CAGR-11.8%
Last 3-Yr EBITDA CAGR-6.9%
Last 3-Yr EPS CAGR-4.9%
Valuation
Street Target Price$128.29
LTM EV/Revenue1.4x
LTM EV/Gross Profit3.9x
LTM EV/EBIT15.7x
LTM EV/EBITDA11.5x
LTM P/E16.8x
LTM EV/FCF19.9x
LTM P/FCF15.4x
LTM P/TB1.7x
LTM P/B5.8x
Dividend Yield0.0%
Payout Ratio0.0%
Executive SummarySituation: Current price is $115.79 versus fair value $87.54 (-24.4% expected return), and valuation confidence is partial. Debate: Bull case depends on Failure to hit FY2026 gross margin targets of 36 percent. Bear case centers on Existential liquidity and solvency risk. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
The multi-price 3.0 format drives a 220 basis point comparable sales lift and attracts higher-income households (60 percent of 3 million new customers). The Family Dollar divestiture simplifies the story and provides 800 million dollars in cash for debt reduction.
Bear Case
Net leverage of 3.9x and a 196.9 percent debt-to-equity ratio create extreme financial risk. The net liquidation value of 0.00 dollars provides no margin of safety, and the company faces 20 million dollars in monthly unmitigated tariff exposure.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Failure to hit FY2026 gross margin targets of 36 percent. If the multi-price rollout fails to sustain margins as freight tailwinds dissipate...
Mid-Term (6-18 months)Impact: Critical
A dilutive equity raise or covenant breach. With 6.5 billion dollars in net debt and a 196.9 percent debt-to-equity ratio, any operational h...
Long-Term (18+ months)Impact: Moderate
Dollar Tree is at a critical juncture following the July 2025 completion of the Family Dollar sale, making this the first full year of opera...
Primary Risks
Concern: High
Existential liquidity and solvency risk. The 'race against time' involves whether the company can generate enough free cash flow to service...
Concern: Medium
The bear case reflects a liquidity crisis triggered by a covenant breach on the 1.5 billion dollar revolver and unmitigated tariff costs, re...
Concern: Medium
The governance structure is currently a battleground between activist-led restructuring and operational reality. The Governance Outcome Tree...
Recent Activity
2025-09-03SEC Filing (8-K)
-8.37%Dollar Tree reports Q2 2025 results with strong sales growth and completes Family Dollar sale
2025-06-05SEC Filing (8-K)
+9.08%Dollar Tree reports Q1 2025 results with 11.3% sales growth and EPS of $1.47
2025-03-28SEC Filing (8-K)
-5.46%Dollar Tree to sell Family Dollar to 1959 Holdings for $1.0075B
2025-03-27SEC Filing (8-K)
+11.18%Dollar Tree reports Q4 2024 results and completes Family Dollar sale agreement
2025-03-05SEC Filing (8-K)
+5.22%Stewart Glendinning appointed next CFO, effective March 30, 2025
Valuation Table
6.7/10Decision Grade