Valuation Overview

Growth Story

Over the next few years, revenue is expected to grow by 8.65%, higher than industry average of 1.94%.

Growth Trajectory

Profitability

In the growth phase company makes 12.30% profit on every dollar of sales, higher than industry average of 5.92%.

Profitability Trajectory

Risk Profile

Investors expect at least 10.07% return to justify the risk of holding stock.

Risk vs Return

Required Return (Cost of Capital) (%)
Return on Invested Capital (%)

Financial Health Overview

Enterprise Value
17.17B USD
Equity Value
10.49B USD
FCF Yield
70.53%
Average ROIC
13.02%
Cost of Capital
9.61%
P/E Ratio
16.74x
Financial MetricMost Recent 12 months (USD)Previous Year (USD)
Revenues11.78B USD16.78B USD
Operating Income or EBIT1.54B USD2.84B USD
Interest Expense99.70M USD112.50M USD
Book Value Of Equity3.61B USD7.31B USD
Book Value Of Debt7.34B USD7.37B USD
Cash and Marketable Securities666.30M USD425.20M USD
Number of Shares Outstanding204.63M--
Minority interests0 USD0 USD
Current Stock Price96.05 USD--
Effective Tax Rate24.00%--
Marginal Tax Rate25.00%--

Performance vs Industry

Revenue Growth
-31.76%
-29.82%Company
vs
1.93%Industry
Below Industry
Operating Margin
+7.19%
13.11%Company
vs
5.92%Industry
Above Industry
Dollar Tree, Inc. demonstrates superior operational efficiency with margins above industry average, indicating effective cost management.

Terminal Value Analysis

Growth Rate
4.59%
Cost of Capital
8.83%
Return on Capital
8.83%
Reinvestment Rate
52.09%
Terminal value represents 57% of total enterprise value, based on 4.59% perpetual growth and 8.83% discount rate.

Equity Value Breakdown

ComponentValueType
Present Value (Terminal Value) 9.75B USD Add
Present Value (Cash Flow Over Next 10 Years) 7.41B USD Add
Value of Operating Assets 17.17B USD Sub-total
Debt 7.34B USD Subtract
Minority Interests — Subtract
Cash 666.30M USD Add
Value of Equity 10.49B USD Sub-total
Number of Shares 204.63M shares Divisor
Estimated Value per Share (Fair Value) 51.31 USD Total
Current Market Price 96.05 USD Reference

Financial Projections

Total FCF Present Value
7.41B USD
Avg Revenue Growth
6.38%
Avg Operating Margin
12.11%
Avg ROIC
13.02%
Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Terminal Year
REVENUE
Revenue12.51B USD13.60B USD14.77B USD16.05B USD17.44B USD18.81B USD20.13B USD21.38B USD22.54B USD23.58B USD24.66B USD
Growth Rate 6.29% 8.65% 8.65% 8.65% 8.65% 7.84% 7.03% 6.22% 5.41% 4.59% 4.59%
PROFITABILITY
Operating Income1.64B USD1.70B USD1.81B USD1.93B USD2.05B USD2.21B USD2.36B USD2.51B USD2.64B USD2.77B USD2.89B USD
Operating Margin 13.11% 12.57% 12.29% 12.02% 11.75% 11.75% 11.75% 11.75% 11.75% 11.75% 11.75%
EBIT (1-tax)1.24B USD1.29B USD1.38B USD1.46B USD1.55B USD1.67B USD1.78B USD1.89B USD1.99B USD2.07B USD2.17B USD
CASH FLOW
Reinvestment333.01M USD361.82M USD393.11M USD427.12M USD420.61M USD367.85M USD348.35M USD321.83M USD288.44M USD301.71M USD1.13B USD
Free Cash Flow914.80M USD937.60M USD988.11M USD1.04B USD1.13B USD1.30B USD1.44B USD1.57B USD1.70B USD1.77B USD1.04B USD
Terminal Value--------------------24.62B USD
Present Value831.10M USD773.89M USD740.96M USD708.76M USD704.16M USD737.27M USD741.06M USD740.31M USD735.04M USD704.27M USD—
EFFICIENCY
ROIC 12.13% 12.24% 12.58% 12.90% 13.20% 13.71% 14.21% 14.65% 15.03% 15.34% 8.83%
Cost of Capital 10.07% 10.07% 10.07% 10.07% 10.07% 9.82% 9.57% 9.32% 9.07% 8.83% 8.83%
Sales/Capital 3.25x 3.25x 3.25x 3.25x 3.25x 3.59x 3.59x 3.59x 3.59x 3.59x —

Profitability & Efficiency

Operating Margin (%)
ROIC (%)

Value Creation Analysis

ROIC (%)
Cost of Capital (%)

Operational Cash Flow Analysis

Free Cash Flow ($B)
Reinvestment ($B)