Dollarama (DOL) AI Stock Analysis

• Market Cap: $52.13B
• Dividend Yield: 0.23%
• Average Volume (3M): 593.80K
• Price to Earnings (P/E): 42.8
• Beta (1Y): 0.59
• Revenue Growth: 9.20%
• EPS Growth: 18.11%
• Country: CA
• Employees: 7,720
• Sector: Consumer Cyclical
• Sector Strength: 58
• Industry: Discount Stores
• EPS (TTM): 0.98
• Shares Outstanding: 277,223,850
• 10 Day Avg. Volume: 690,534
• 30 Day Avg. Volume: 593,802
• PEG Ratio: 1.08
• Price to Book (P/B): 810.58
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 32.33
• 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: $200.35
• Price Target Upside: 6.54% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 71 Outperform
• Price Target: C$212.00 ▲(12.73%Upside)

Dollarama's strong financial performance and strategic expansion plans are the primary drivers of its stock score. Despite high leverage, the company's robust operational efficiency and cash flow management support its growth trajectory. However, high valuation metrics and potential macroeconomic risks slightly temper the overall outlook.

Positive Factors

Earnings

Expecting another solid quarter; increasing target to C$178.00.

Growth Potential

Dollarcity is expected to provide another leg of growth over the medium term.

Negative Factors

Growth Concerns

There is caution towards Dollarcity's near-term growth trajectory due to a lower growth rate and a volatile political climate in Colombia.

Dollarama Business Overview & Revenue Model

Company Description

Dollarama Inc. (DOL) is a leading Canadian value retailer offering a wide range of general merchandise, consumables, and seasonal products at low fixed price points. Established in 1992 and headquartered in Montreal, Quebec, the company operates an extensive network of stores across Canada. Dollarama focuses on delivering value through a compelling assortment of products, catering to a diverse customer base seeking affordable and convenient shopping experiences.

How the Company Makes Money

Dollarama generates revenue primarily through the sale of a variety of low-cost merchandise across its extensive network of retail stores. The company's key revenue streams include consumables such as food, beverages, and household products, general merchandise like kitchenware and hardware, and seasonal items including holiday decorations and garden supplies. Dollarama employs a high-volume, low-margin business model that relies on efficient supply chain management and strategic product sourcing to keep costs low while maintaining a diverse product offering. The company also benefits from economies of scale due to its large number of retail locations, which helps to drive profitability. Additionally, Dollarama's focus on providing value to customers through its fixed price points attracts a broad consumer base, further bolstering its sales and revenue growth.

Dollarama Financial Statement Overview

Summary

Dollarama shows strong financial health with consistent revenue growth, robust profitability metrics, and effective cash flow management. Despite high leverage, the company displays solid margins and cash conversion, positioning it well for future growth.

Income Statement

Dollarama has demonstrated strong growth in revenue with a consistent increase over the past years, reaching CAD 6.41 billion in the latest annual report. The gross profit margin is robust at approximately 45.1%, indicating effective cost management. Net profit margin increased to 18.2%, reflecting improved profitability. Both EBIT and EBITDA margins show strong operational efficiency at 26.7% and 33.4%, respectively. Overall, the income statement reflects a healthy and growing financial performance with solid margins.

Balance Sheet

The balance sheet indicates a high debt-to-equity ratio of 3.96, suggesting significant leverage but also a strong return on equity of 98.3%, driven by high net income relative to equity levels. The equity ratio stands at 18.3%, indicating a moderate reliance on debt financing. Despite high leverage, the company maintains a positive equity position, showing financial stability yet highlighting a potential risk in debt management.

Cash Flow

Cash flow analysis reveals a solid operating cash flow of CAD 1.64 billion, with a free cash flow growth rate of 11.6%. The operating cash flow to net income ratio is notable at 1.41, demonstrating strong cash conversion. The free cash flow to net income ratio of 1.20 further supports efficient cash management. Dollarama's cash flow statements indicate robust cash generation capabilities, supporting ongoing operations and potential debt servicing.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
6.41B	5.87B	5.05B	4.33B	4.03B
	Gross Profit
2.89B	2.61B	2.20B	1.90B	1.77B
	EBIT
1.71B	1.50B	1.19B	984.62M	861.00M
	EBITDA
2.15B	1.81B	1.48B	1.25B	1.11B
	Net Income Common Stockholders
1.17B	1.01B	801.86M	663.17M	564.35M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
122.69M	313.92M	101.26M	71.06M	439.14M
	Total Assets
6.48B	5.26B	4.82B	4.06B	4.22B
	Total Debt
4.71B	4.33B	4.21B	3.61B	3.46B
	Net Debt
4.59B	4.02B	4.11B	3.54B	3.02B
	Total Liabilities
5.29B	4.88B	4.79B	4.13B	3.89B
	Stockholders Equity
1.19B	380.85M	28.41M	-66.03M	334.85M
Cash Flow		Free Cash Flow
1.40B	1.25B	712.22M	906.37M	721.25M
	Operating Cash Flow
1.64B	1.53B	869.04M	1.07B	889.08M
	Investing Cash Flow
-224.14M	-250.87M	-156.55M	-158.67M	-264.52M
	Financing Cash Flow
-1.61B	-966.62M	-682.29M	-1.28B	-275.88M

Dollarama Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 188.06
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 Positive. The current price of 188.06 is above the 20-day moving average (MA) of 182.42, above the 50-day MA of 174.35, and above the 200-day MA of 150.69, indicating a bullish trend. The MACD of 5.57 indicates Negative momentum. The RSI at 63.40 is Neutral, neither overbought nor oversold. The STOCH value of 67.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:DOL.

Dollarama Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATZ	83 Outperform	$6.28B	35.88	21.90%	―	17.40%	158.89%
CTC.A	78 Outperform	$10.31B	12.03	14.70%	5.25%	-1.12%	201.58%
PET	78 Outperform	C$2.18B	24.84	99.31%	1.50%	4.61%	3.95%
CTC	76 Outperform	C$10.31B	17.58	14.70%	2.65%	-1.12%	201.58%
LNF	73 Outperform	C$1.85B	11.67	14.49%	4.03%	0.47%	9.41%
DOL	71 Outperform	$52.13B	42.84	138.71%	0.23%	9.20%	18.11%
Sector *	62 Neutral	$16.17B	10.72	-5.56%	3.15%	1.66%	-23.91%

Dollarama Corporate Events

Dollarama Announces $600 Million Private Offering of Senior Unsecured Notes

Dollarama Inc. announced a private offering of $600 million in senior unsecured notes, which are due in December 2030 and carry an interest rate of 3.850% per annum. The proceeds from this offering will be used to repay existing debt and for general corporate purposes, potentially strengthening Dollarama’s financial position and operational flexibility. The notes have been assigned a provisional BBB (high) rating by DBRS Limited and are being offered in Canada through a private placement, highlighting Dollarama’s strategic financial management and its focus on maintaining a stable credit profile.

The most recent analyst rating on (TSE:DOL) stock is a Hold with a C$128.00 price target. To see the full list of analyst forecasts on Dollarama stock, see the TSE:DOL Stock Forecast page.

Dollarama Announces Election of Board of Directors

Dollarama Inc. announced the election of its board of directors at the annual shareholders meeting, with all nominees listed in the management proxy circular being elected. This election reflects the company’s stable governance structure, which is crucial for maintaining its market position and operational continuity, benefiting stakeholders by ensuring consistent leadership.

The most recent analyst rating on (TSE:DOL) stock is a Hold with a C$128.00 price target. To see the full list of analyst forecasts on Dollarama stock, see the TSE:DOL Stock Forecast page.

Dollarama Reports Strong Q1 2026 Results and Expands Internationally

Dollarama Inc. reported strong financial results for the first quarter of fiscal 2026, with an 8.2% increase in sales to $1,521.2 million and a 26.9% rise in net earnings to $273.8 million. The company attributes this growth to increased store numbers, strong demand for consumables, and successful seasonal offerings. Dollarama is also advancing its international expansion plans with the imminent opening of its first stores in Mexico and the anticipated acquisition of Australia’s largest discount retailer, The Reject Shop, which is expected to close by the end of July.

The most recent analyst rating on (TSE:DOL) stock is a Hold with a C$128.00 price target. To see the full list of analyst forecasts on Dollarama stock, see the TSE:DOL Stock Forecast page.

Dollarama Reports Strong Fiscal 2025 Results and Plans for International Expansion

Dollarama reported strong financial results for the fourth quarter and fiscal year 2025, with a notable increase in sales, earnings, and store count. The company achieved a 14.8% increase in sales for the fourth quarter and a 9.3% rise for the fiscal year, driven by new store openings and comparable store sales growth. Dollarama’s diluted net earnings per share rose significantly, and the company increased its quarterly dividend by 15%. The company also announced plans for international expansion, including the proposed acquisition of The Reject Shop in Australia, highlighting its growth strategy and confidence in its business model.

Dollarama Expands into Australia with Acquisition of The Reject Shop

Dollarama Inc. has announced its acquisition of The Reject Shop, Australia’s largest discount retailer, for approximately A$259 million. This strategic move marks Dollarama’s entry into the Australian market, providing a platform for growth and expansion. The acquisition is expected to have minimal immediate impact on Dollarama’s earnings and financial ratios, while offering potential for significant store network expansion in Australia.