Is Dollar General Corporation (DG) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $136.68, Dollar General Corporation (DG) sits inside a range too wide to call either way: our valuation lenses put the business somewhere between $64.19 and $328.81 per share. They disagree too widely for us to state a single fair value. We publish the range rather than a midpoint because a number that precise would claim more than the methods can support. This is an educational model, not a price target or a recommendation.
The valuation discounts Dollar General Corporation's projected free cash flows at a weighted-average cost of capital (WACC) of 7.7%, with a long-run terminal growth rate of 2.5%. About 80% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — the market is implying roughly -2.3% annual revenue growth for DG. Our base case instead compounds to about 3.7% a year over the same forecast, so the market is pricing in slower growth than our base case. The reverse-DCF is a quick sanity check: it reframes 'is this stock cheap?' as 'do I believe the growth the price requires?' rather than arguing over a single point estimate of fair value.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, DG's modeled DCF value ranges from about $99.52 to $292.02 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Dollar General Corporation would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of DG's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind DG's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $42,724,400,000 | Dollar General Q4/FY2025 earnings release, 8-K Ex-99 (accession 0001104659-26-026697, filed 2026-03-12) + Dollar General FY2025 10-K (accession 0001104659-26-032325, filed 2026-03-20), 52 weeks ended 2026-01-30: Net sales $42,724.4M for the 52 weeks ended 2026-01-30 (FY2025), +5.2% on FY2024's $40,612.3M, on same-store sales +3.0% (traffic +1.6%, average ticket +1.4%) plus new stores (589 opened, 290 closed; 20,893 stores at year end). Consumables are 82% of sales ($35.1B), seasonal 10%, home 5%, apparel 3% - this is a needs-based, mostly-food-and-household business, not a discretionary one. Revenue history on the same XBRL line: $27.8B FY2019, $33.7B FY2020 (pandemic step-up), $34.2B, $37.8B (a 53-week year), $38.7B, $40.6B, $42.7B. CROSS-CHECK: H1 2026 (26 weeks to 2026-07-31) net sales $22,077.3M, +4.3% on H1 2025 (Q1 +3.4%, Q2 +5.2%), same-store sales +2.0% and +3.5% (Q2 release). Trailing twelve months to 2026-07-31: $43,638M. Used unchanged as the base; the DCF grows it by forecast.revenue_growth. |
| Base EBIT margin | 5.2% | Dollar General Q4/FY2025 earnings release, 8-K Ex-99 (accession 0001104659-26-026697, filed 2026-03-12) + Dollar General FY2025 10-K (accession 0001104659-26-032325, filed 2026-03-20), 52 weeks ended 2026-01-30: GAAP operating profit $2,203.7M / net sales $42,724.4M = 5.16%. A clean year: no special items called out (FY2024's 4.22% carried $232M of store-portfolio-optimization charges; ~4.8% without them). Margin history on the same tag: 9.4% FY2016, 8.6%, 8.3%, 8.3% FY2019, 10.5% FY2020 (pandemic), 9.4% FY2021, 8.8% FY2022, then a collapse to 6.3% FY2023 and 4.2% FY2024 on shrink, markdowns, labour and a weaker low-income customer, and a first step back to 5.2% in FY2025 on lower shrink and damages and higher markups. Operating leases: $1.99B of FY2025 operating lease cost (10-K lease note) sits inside cost of goods and SG&A, so this margin is AFTER rent - consistent with leaving the $11.2B of operating-lease liabilities out of net debt. Not used to forecast (Year 1 starts from guidance) but it is one leg of the cyclical peak test; Year 1 (5.42%) sits above it. CROSS-CHECK: H1 2026 operating profit $1,407.7M = 6.38% of sales (H1 2025 5.54%), of which ~$74M (66bp of Q2 sales) is the net IEEPA tariff refund - ex-refund H1 ~6.04%. |
| Forecast revenue growth | 4% → 4% → 4% → 4% → 3% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation. Shared by every model in this tracker. |
| Beta | 0.58 | Assumption — Yahoo Finance 5Y-monthly beta via yfinance (read 2026-10-05) + own regressions + peer betas: Published 5Y-monthly beta is 0.226; my own 60-month regression of yfinance adjusted monthly closes on the S&P 500 gives 0.227 (so not a data error), 36-month 0.085, 120-month 0.372, and a 2-year weekly regression ~0.00. NORMALIZED UP to 0.58, the median of the published betas of discount/value-retail peers on the same feed (DLTR 0.716, WMT 0.578, OLLI 0.414, BJ 0.166, FIVE 0.943 -> median 0.578), the peer-median method this tracker used for UnitedHealth. CONSERVATIVE vs published: it raises the discount rate and LOWERS the value. Reason: DG's five-year window is dominated by a stock-specific collapse (from the 2022-23 highs to a 52-week low of $95.11 and back to today's level) driven by its own shrink, labour and execution problems - idiosyncratic moves a regression reads as low co-movement, not low risk. At 0.226 DG's cost of equity would be 6.4%, BELOW the ~7.0% it would pay on a new 10-year bond - equity behind BBB/Baa3 debt cannot sensibly cost less than the debt. At 0.58 the cost of equity is 8.14%, ~114bp over the bond. The two lighter normalizations sit higher in value: the 10-year regression 0.372 gives $183.91 and Blume (0.67 x 0.226 + 0.33 = 0.48) gives $164.62; DLTR's 0.716 gives $133.14. THIS IS THE LARGEST SINGLE JUDGEMENT IN THE FILE: each 0.1 of beta is worth roughly $12-15/share around this point ($137.21 at 0.68), and the published 0.226 gives $217.59. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability. For DG it is not generous: sales compounded ~7% a year FY2016-FY2025 ($22.0B to $42.7B), but that was a store-count build-out now slowing to ~2% unit growth on a 21,000-store base; long-run growth of a mature, consumables-led chain should track nominal consumer spending. 3.0% gives $164.32; 2.0% gives $137.81. Must remain < WACC of 7.72%. |
| Diluted shares | 222M | Dollar General Q2 2026 earnings release, 8-K Ex-99 (accession 0001104659-26-101918, filed 2026-08-27): Q2 2026 (13 weeks to 2026-07-31) weighted-average diluted shares 221,505K; H1 221,532K; FY2025 220,814K. Shares outstanding 220.62M at 2026-08-25. The count has been FLAT for three years: DG bought back nothing in FY2025 or H1 2026 while it repaid debt. It now 'intends to repurchase shares... in the second half' - guidance allows up to $700M (~2.5% of the market cap at today's price) with $1.4B of authorization left. Buybacks at a price below the model's value would add to per-share value; the model does not assume them. SBC was $91.5M in FY2025 (0.2% of sales). |
| Market price | $136.68 | Delayed quote · as of 2026-11-10 05:05 UTC |
Explore more
Most undervalued stocks (per our valuation) · Undervalued Consumer stocks · All valued stocks · Interactive DG valuation & downloadable modelTickerWorth is an educational DCF tool, not a licensed investment adviser. Figures are estimates derived from public filings and market data and can be wrong.