Dollar General (DG) AI Stock Analysis

• Market Cap: $24.97B
• Dividend Yield: 2.08%
• Average Volume (3M): 3.94M
• Price to Earnings (P/E): 21.6
• Beta (1Y): -0.20
• Revenue Growth: 4.77%
• EPS Growth: -23.73%
• Country: US
• Employees: 194,200
• Sector: Consumer Cyclical
• Sector Strength: 63
• Industry: Discount Stores
• EPS (TTM): 1.78
• Shares Outstanding: 220,070,620
• 10 Day Avg. Volume: 4,780,413
• 30 Day Avg. Volume: 3,938,471
• PEG Ratio: -1.40
• Price to Book (P/B): 3.37
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 14.81
• Enterprise Value/Market Cap: 1.66
• Enterprise Value/Revenue: 0.26
• Enterprise Value/Gross Profit: 3.52
• Enterprise Value/Ebitda: 3.68
• 1Y Price Target: $117.05
• Price Target Upside: 3.15% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 23

• Rating: 69 Neutral
• Price Target: $122.00 ▲(7.51%Upside)

Dollar General's robust earnings performance and technical strength are major positives, driving the stock score. However, concerns about valuation and financial leverage partially offset these strengths. The company's strategic expansions and strong market position provide confidence, but attention to cost management and debt is crucial.

Positive Factors

Earnings Beat

DG delivered an encouraging Q1 beat; momentum inflected after a long run of weakness.

Market Share Gains

Dollar General is gaining market share from traditional grocery and drug stores, indicating competitive strength.

Strategic Initiatives

Dollar General's Back to Basics initiatives, including SKU rationalization and inventory reduction, are working effectively, driving efficiencies.

Negative Factors

Competitive Pressure

There are concerns about Dollar General's ability to compete with Walmart in delivering value and convenience long-term.

Financial Headwinds

The expected increase in incentive compensation is seen as a financial headwind for the company.

Growth Challenges

Management indicated momentum has remained consistent into Q2, yet FY guidance now implies decelerating comp growth against easier compares.

Dollar General Business Overview & Revenue Model

Company Description

Dollar General Corporation, a discount retailer, provides various merchandise products in the southern, southwestern, Midwestern, and eastern United States. It offers consumable products, including paper and cleaning products, such as paper towels, bath tissues, paper dinnerware, trash and storage bags, disinfectants, and laundry products; packaged food comprising cereals, pasta, canned soups, fruits and vegetables, condiments, spices, sugar, and flour; and perishables that include milk, eggs, bread, refrigerated and frozen food, beer, and wine. The company's consumable products also comprise snacks, such as candies, cookies, crackers, salty snacks, and carbonated beverages; health and beauty products, including over-the-counter medicines and personal care products, such as soaps, body washes, shampoos, cosmetics, and dental hygiene and foot care products; pet supplies and pet food; and tobacco products. In addition, it offers seasonal products comprising holiday items, toys, batteries, small electronics, greeting cards, stationery, prepaid phones and accessories, gardening supplies, hardware, and automotive and home office supplies; and home products that include kitchen supplies, cookware, small appliances, light bulbs, storage containers, frames, candles, craft supplies and kitchen, and bed and bath soft goods. Further, the company provides apparel, which comprise casual everyday apparel for infants, toddlers, girls, boys, women, and men, as well as socks, underwear, disposable diapers, shoes, and accessories. As of February 25, 2022, it operated 18,190 stores in 47 states in the United States. The company was formerly known as J.L. Turner & Son, Inc. and changed its name to Dollar General Corporation in 1968. Dollar General Corporation was founded in 1939 and is based in Goodlettsville, Tennessee.

How the Company Makes Money

Dollar General generates revenue primarily through the sale of general merchandise and consumables at its retail locations. The company's revenue model is largely based on high-volume sales of low-cost goods, which include categories such as food, cleaning supplies, paper products, health and beauty aids, pet supplies, and basic apparel. A significant contributor to Dollar General's earnings is its expansive network of over 17,000 stores, strategically located to maximize accessibility for underserved communities. The company also benefits from efficient supply chain management and strategic partnerships with suppliers, enabling it to maintain competitive pricing and attractive product margins. Additionally, Dollar General has been expanding its private label offerings, which tend to have higher profit margins compared to national brands, further enhancing its profitability.

Dollar General Financial Statement Overview

Summary

Dollar General exhibits steady revenue growth and strong cash flow performance, which are positive indicators for long-term sustainability. However, declining profit margins and high leverage present potential risks, necessitating a focus on cost management and debt reduction.

Income Statement

Dollar General's income statement shows moderate performance with a gross profit margin of approximately 29.6% and a net profit margin of 2.8% for the latest year. The revenue growth rate from 2024 to 2025 is about 5%, indicating steady growth, though margins have slightly decreased due to rising costs impacting profitability. The EBIT and EBITDA margins have also contracted, reflecting operational challenges.

Balance Sheet

The balance sheet indicates a relatively high debt-to-equity ratio of 2.36, suggesting significant leverage, which poses financial risk. However, the equity ratio is 23.8%, showing that a reasonable portion of assets is financed by equity. Return on equity has decreased over recent years to 15.2%, reflecting reduced profitability relative to equity.

Cash Flow

The cash flow statement reveals robust operating cash flow relative to net income, with an operating cash flow to net income ratio of 2.66. Free cash flow grew substantially by 143.9% from the previous year, indicating strong cash generation capability and efficient capital expenditure management.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
40.61B	38.69B	37.84B	34.22B	33.75B
	Gross Profit
12.02B	11.72B	11.82B	10.81B	10.72B
	EBIT
1.71B	2.45B	3.33B	3.22B	3.55B
	EBITDA
2.69B	3.30B	4.05B	3.86B	4.13B
	Net Income Common Stockholders
1.13B	1.66B	2.42B	2.40B	2.66B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
932.58M	537.28M	381.58M	344.83M	1.38B
	Total Assets
31.13B	30.80B	29.08B	26.33B	25.86B
	Total Debt
17.46B	18.09B	17.66B	14.25B	13.59B
	Net Debt
16.53B	17.55B	17.28B	13.90B	12.21B
	Total Liabilities
23.72B	24.05B	23.54B	20.07B	19.20B
	Stockholders Equity
7.41B	6.75B	5.54B	6.26B	6.66B
Cash Flow		Free Cash Flow
1.69B	691.58M	423.97M	1.80B	2.85B
	Operating Cash Flow
3.00B	2.39B	1.98B	2.87B	3.88B
	Investing Cash Flow
-1.31B	-1.69B	-1.56B	-1.07B	-1.02B
	Financing Cash Flow
-1.29B	-542.07M	-392.46M	-2.83B	-1.71B

Dollar General Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 113.48
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DG, the sentiment is Positive. The current price of 113.48 is above the 20-day moving average (MA) of 99.37, above the 50-day MA of 94.46, and above the 200-day MA of 83.39, indicating a bullish trend. The MACD of 5.08 indicates Negative momentum. The RSI at 74.21 is Negative, neither overbought nor oversold. The STOCH value of 89.60 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DG.

Dollar General Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OLLI	78 Outperform	$7.32B	36.71	12.32%	―	8.70%	2.54%
BJ	74 Outperform	$14.67B	25.83	32.76%	―	2.84%	11.25%
WMT	73 Outperform	$779.85B	41.77	22.80%	0.91%	4.22%	-0.17%
DG	69 Neutral	$24.97B	21.64	15.69%	2.08%	4.77%	-23.73%
TGT	66 Neutral	$44.22B	10.70	29.08%	4.60%	-0.69%	2.03%
Sector *	62 Neutral	$6.88B	11.32	2.95%	3.87%	2.70%	-24.57%
DLTR	61 Neutral	$19.72B	―	19.25%	―	-20.46%	-202.26%

Dollar General Corporate Events

Dollar General Holds Annual Shareholders Meeting

Dollar General held its Annual Meeting of Shareholders on May 29, 2025, where several directors were elected to serve until the next annual meeting in 2026. The meeting also saw the approval of the compensation for the company’s named executive officers and the ratification of Ernst & Young LLP as the independent registered public accounting firm for fiscal year 2025. However, several shareholder proposals, including those related to human rights policy, food waste transparency, and employee healthcare, were not approved. Additionally, the Board of Directors declared a quarterly cash dividend of $0.59 per share, payable on July 22, 2025.

The most recent analyst rating on (DG) stock is a Buy with a $170.00 price target. To see the full list of analyst forecasts on Dollar General stock, see the DG Stock Forecast page.

Dollar General Amends Credit Agreement for Flexibility

On March 11, 2025, Dollar General Corporation amended its unsecured credit agreement, originally dated September 3, 2024, to adjust financial covenants and restrictions during a Covenant Relief Period lasting until January 30, 2026. The amendment impacts the company’s leverage and fixed charge coverage ratios, limits stock repurchases, and reduces the ability to incur additional debt, reflecting a strategic financial maneuver to maintain operational flexibility. Additionally, the company announced a quarterly cash dividend of $0.59 per share, payable on April 22, 2025, indicating a commitment to returning value to shareholders.