Dollarama (DOL) AI Stock Analysis

• Market Cap: C$55.00B
• Dividend Yield: 0.2%
• Average Volume (3M): 611.30K
• Price to Earnings (P/E): 42.6
• Beta (1Y): 0.48
• Revenue Growth: 14.02%
• EPS Growth: 20.11%
• Country: CA
• Employees: 7,720
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Discount Stores
• EPS (TTM): 1.17
• Shares Outstanding: 273,785,220
• 10 Day Avg. Volume: 793,608
• 30 Day Avg. Volume: 611,302
• PEG Ratio: 1.93
• Price to Book (P/B): 32.39
• Price to Sales (P/S): 6.00
• P/FCF Ratio: 29.03
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$223.76
• Price Target Upside: 12.97% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): 4.68
• Revenue Forecast (FY): C$7.23B

• Rating: 64 Neutral
• Price Target: C$213.00 ▲(7.54% Upside)

The score is driven primarily by strong operating profitability and cash flow, offset by high balance-sheet leverage. Technicals are moderately supportive but not strongly bullish, while valuation is the largest headwind due to a high P/E and minimal dividend yield.

Positive Factors

High gross and net margins

Sustained high gross and net margins reflect durable unit economics from low-cost sourcing, disciplined pricing and efficient store operations. These margins provide structural earnings resilience, funding reinvestment and cushioning against cost shocks over the medium term.

Strong cash generation

Consistent conversion of earnings into operating and free cash flow supports capital expenditure for store growth, working capital needs and debt servicing. Robust cash generation is a durable strength that enhances financial flexibility and self-funding ability.

Large store footprint and scale

A nationwide store network and leadership in discount retail create economies of scale, supplier leverage and brand recognition. These structural advantages support sourcing cost advantages, merchandising breadth and long-term competitive positioning.

Negative Factors

Elevated debt-to-equity

A high debt-to-equity ratio materially increases financial risk, raising interest and refinancing exposure. Persistent leverage can constrain strategic flexibility, amplify downside in weaker sales periods, and make the business more sensitive to rising rates.

Low equity ratio / reliance on debt

Reliance on debt rather than equity reduces the balance-sheet cushion and magnifies shocks to cash flow. This structural funding profile limits options for aggressive capex or acquisitions without increasing leverage, elevating medium-term solvency risk.

Modest recent revenue growth

A mid-single-digit revenue growth rate signals limited organic expansion at scale in its core market. With a large existing footprint, sustaining faster top-line growth may require heavier capital investment or category expansion, challenging long-term upside.

Dollarama Business Overview & Revenue Model

Company Description

Dollarama Inc. operates a chain of dollar stores in Canada. Its stores offer general merchandise, consumables, and seasonal products. The company also sells its products through online store. As of January 30, 2022, it operated 1,421 stores. The company was formerly known as Dollarama Capital Corporation and changed its name to Dollarama Inc. in September 2009. Dollarama Inc. was founded in 1992 and is headquartered in Montreal, Canada.

How the Company Makes Money

Dollarama generates revenue primarily through the sale of its low-cost merchandise. The company's business model is centered on offering a fixed price point for products, which attracts cost-conscious consumers. Key revenue streams include sales from a wide array of categories, including consumables, merchandise, and seasonal products. The company benefits from economies of scale, allowing it to source products at lower costs, which enhances profit margins. Additionally, Dollarama has established partnerships with various suppliers to secure a consistent inventory of goods, further stabilizing its revenue flow. The company's strategic focus on expanding its store footprint and optimizing its product offerings also contributes to its earnings growth.

Dollarama Financial Statement Overview

Summary

Strong profitability (TTM gross margin 46.91%, net margin 18.87%) and solid cash generation (operating cash flow to net income 103.51%, FCF to net income 85.74%) support a high score, but it is tempered by elevated leverage (debt-to-equity 3.82) which increases financial risk.

Income Statement

Dollarama's income statement shows strong profitability with a TTM gross profit margin of 46.91% and a net profit margin of 18.87%. The company has demonstrated consistent revenue growth, with a TTM revenue growth rate of 5.19%. EBIT and EBITDA margins are robust at 25.03% and 28.73%, respectively, indicating efficient operations. Overall, Dollarama's income statement reflects a healthy and growing business with strong profitability metrics.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 3.82 in the TTM period, indicating significant leverage, which poses a potential risk. However, the return on equity is exceptionally high at 96.62%, showcasing effective use of equity to generate profits. The equity ratio is relatively low, suggesting reliance on debt financing. While profitability is strong, the high leverage warrants caution.

Cash Flow

Dollarama's cash flow statement indicates solid cash generation with a TTM free cash flow to net income ratio of 85.74% and a stable operating cash flow to net income ratio of 103.51%. The free cash flow growth rate of 4.39% in the TTM period suggests positive cash flow trends. Overall, the company maintains healthy cash flow metrics, supporting its operational and financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.04B	6.41B	5.87B	5.05B	4.33B	4.03B
Gross Profit	3.17B	2.89B	2.61B	2.35B	2.05B	1.91B
EBITDA	2.02B	1.70B	1.52B	1.24B	1.07B	999.30M
Net Income	1.31B	1.17B	1.01B	801.86M	663.17M	564.35M
Balance Sheet
Total Assets	7.40B	6.48B	5.26B	4.82B	4.06B	4.22B
Cash, Cash Equivalents and Short-Term Investments	205.52M	122.69M	313.92M	101.26M	71.06M	439.14M
Total Debt	5.39B	4.71B	4.33B	4.22B	3.62B	3.46B
Total Liabilities	6.10B	5.29B	4.88B	4.79B	4.13B	3.89B
Stockholders Equity	1.30B	1.19B	380.85M	28.41M	-66.03M	334.85M
Cash Flow
Free Cash Flow	1.48B	1.33B	1.18B	670.81M	929.11M	749.04M
Operating Cash Flow	1.73B	1.54B	1.43B	804.86M	1.07B	889.08M
Investing Cash Flow	-507.97M	-224.14M	-250.87M	-156.55M	-158.67M	-264.52M
Financing Cash Flow	-1.30B	-1.51B	-966.62M	-618.11M	-1.28B	-275.88M

Dollarama Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 198.07
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:DOL, the sentiment is Neutral. The current price of 198.07 is below the 20-day moving average (MA) of 201.82, below the 50-day MA of 198.13, and above the 200-day MA of 185.33, indicating a neutral trend. The MACD of 0.29 indicates Positive momentum. The RSI at 45.02 is Neutral, neither overbought nor oversold. The STOCH value of 22.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:DOL.

Dollarama Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MRU	78 Outperform	C$21.05B	21.25	14.48%	1.50%	3.71%	12.40%
L	76 Outperform	$74.27B	30.37	21.51%	1.52%	4.21%	14.03%
WN	70 Outperform	C$36.46B	25.12	26.36%	1.23%	4.15%	149.50%
EMP.A	68 Neutral	C$10.60B	15.71	12.66%	1.78%	2.58%	7.85%
SAP	66 Neutral	C$16.85B	-211.55	-1.32%	1.89%	5.37%	-135.85%
DOL	64 Neutral	C$55.00B	42.56	102.01%	0.20%	14.02%	20.11%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%

Dollarama Corporate Events

Dollarama Reports Robust Q3 Fiscal 2026 Results Amidst Global Expansion

Dollarama reported a strong financial performance for the third quarter of fiscal 2026, with sales increasing by 22.2% to $1,909.4 million. The company saw a 6.0% rise in comparable store sales in Canada, driven by sustained demand for consumables and seasonal products. The acquisition of The Reject Shop in Australia contributed significantly to the sales growth. Despite an unpredictable economic environment, Dollarama’s business model continues to show resilience, with international expansion plans underway, including growth in Latin America and Australia.

The most recent analyst rating on (TSE:DOL) stock is a Hold with a C$206.00 price target. To see the full list of analyst forecasts on Dollarama stock, see the TSE:DOL Stock Forecast page.