Dollarama (DOL) AI Stock Analysis

• Market Cap: C$55.69B
• Dividend Yield: 0.2%
• Average Volume (3M): 611.30K
• Price to Earnings (P/E): 43.1
• Beta (1Y): 0.54
• 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$215.63
• Price Target Upside: 6.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): 4.68
• Revenue Forecast (FY): C$7.23B

• Rating: 71 Outperform
• Price Target: C$221.00 ▲(8.66% Upside)

Dollarama's overall stock score reflects strong financial performance and positive technical indicators, supported by a positive earnings call outlook. However, the high valuation and potential risks from significant leverage and integration costs in new markets temper the score.

Positive Factors

Revenue Growth

Strong revenue growth indicates effective market strategies and product demand, supporting long-term business expansion and stability.

International Expansion

International expansion into Mexico and Australia diversifies revenue streams and enhances global market presence, fostering long-term growth.

Cash Generation

Strong cash generation supports operational stability and provides flexibility for strategic investments and debt management.

Negative Factors

High Leverage

Significant leverage poses financial risk, potentially limiting the company's ability to invest in growth and manage economic downturns.

Integration Costs

High integration costs in Australia may strain resources and delay profitability, impacting short-to-medium term financial performance.

Rising SG&A Costs

Increased SG&A costs can pressure margins, reducing profitability and potentially impacting the company's competitive pricing strategy.

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

Dollarama exhibits strong financial performance with robust profitability and cash flow metrics. The company shows consistent revenue growth and effective cost management. However, the high debt-to-equity ratio highlights potential financial risk due to significant leverage. Despite this, the high return on equity and strong cash flow generation provide a solid foundation for future growth.

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	1.42B	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: Positive
• Last Price: 203.39
• 50DMA: Positive
• 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 Positive. The current price of 203.39 is above the 20-day moving average (MA) of 200.33, above the 50-day MA of 191.64, and above the 200-day MA of 181.26, indicating a bullish trend. The MACD of 2.38 indicates Positive momentum. The RSI at 62.33 is Neutral, neither overbought nor oversold. The STOCH value of 44.28 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
MRU	78 Outperform	C$20.95B	21.09	14.48%	1.51%	3.71%	12.40%
L	76 Outperform	C$73.07B	29.87	21.51%	1.51%	4.21%	14.03%
DOL	71 Outperform	C$55.69B	43.10	102.01%	0.20%	14.02%	20.11%
WN	70 Outperform	C$36.22B	24.77	26.36%	1.23%	4.15%	149.50%
EMP.A	68 Neutral	C$10.70B	15.75	12.66%	1.80%	2.58%	7.85%
SAP	66 Neutral	C$16.89B	-206.78	-1.32%	1.89%	5.37%	-135.85%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%

Dollarama Corporate Events

Dollarama’s Earnings Call: Growth Amid Challenges

Dollarama’s recent earnings call conveyed a generally positive sentiment, highlighting the company’s robust international expansion and strong revenue growth. However, challenges were noted, particularly with flat seasonal sales and increased costs tied to new operations in Australia. Despite these hurdles, Dollarama’s core Canadian business remains strong and continues to expand.

Dollarama Reports Strong Q2 2026 Results Amid Global Expansion

Dollarama Inc., a prominent Canadian value retailer, operates over 2,700 stores across seven countries, offering a wide range of affordable everyday and seasonal merchandise. The company has a significant presence in Canada, Australia, and Latin America through its subsidiary, Dollarcity.

Dollarama’s Q2 Fiscal 2026 Results Highlight International Expansion and Strong Sales Growth

Dollarama reported a strong financial performance for the second quarter of fiscal 2026, with a 10.3% increase in sales to $1,723.8 million and a 12.4% rise in net earnings to $321.5 million. The acquisition of The Reject Shop Limited in Australia and the opening of Dollarcity’s first store in Mexico mark significant milestones in Dollarama’s international expansion strategy, enhancing its growth prospects and market diversification.

The most recent analyst rating on (TSE:DOL) stock is a Buy with a C$212.00 price target. To see the full list of analyst forecasts on Dollarama stock, see the TSE:DOL Stock Forecast page.