Is Dollar Tree, Inc. (DLTR) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $137.23, Dollar Tree, Inc. (DLTR) sits inside a range too wide to call either way: our valuation lenses put the business somewhere between $66.92 and $214.87 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 Tree, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 8.3%, with a long-run terminal growth rate of 2.5%. About 78% 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 6.0% annual revenue growth for DLTR. Our base case instead compounds to about 5.4% a year over the same forecast, so the market's implied growth is broadly in line with 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, DLTR's modeled DCF value ranges from about $75.24 to $193.68 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 Tree, Inc. 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 DLTR's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind DLTR's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $19,411,800,000 | Dollar Tree Q4/FY2025 earnings release, 8-K Ex-99.1 (accession 0000935703-26-000024, filed 2026-03-16), 52 weeks ended 2026-01-31 + Dollar Tree FY2025 10-K (accession 0000935703-26-000025, filed 2026-03-16), 52 weeks ended 2026-01-31: CONTINUING OPERATIONS ONLY (Dollar Tree U.S. and Dollar Tree Canada banners; Family Dollar was sold on 2025-07-05 and is reported as discontinued operations for every period). Total revenue $19,411.8M for the 52 weeks ended 2026-01-31 = net sales $19,395.7M + other revenue $16.1M; +10.4% on FY2024's $17,578.5M, on Dollar Tree same-store sales +5.3% (ticket +4.3%, traffic +1.0%) plus 402 new stores and Family Dollar-to-Dollar Tree conversions. Total revenue is used because the company states its operating margin on total revenue. Continuing-operations history on the same basis (10-K): $16,781.1M FY2023 (a 53-week year), $17,578.5M FY2024, $19,411.8M FY2025. CROSS-CHECK: H1 FY2026 (26 weeks to 2026-08-01) total revenue $9,867.0M, +7.1% (Q2 net sales +7.0%, same-store sales +3.7% on ticket +3.3% and traffic +0.4%); trailing twelve months to 2026-08-01 $20,068.7M. Used unchanged as the base; the DCF grows it by forecast.revenue_growth. |
| Base EBIT margin | 8.5% | Dollar Tree Q4/FY2025 earnings release, 8-K Ex-99.1 (accession 0000935703-26-000024, filed 2026-03-16), 52 weeks ended 2026-01-31 + Dollar Tree FY2025 10-K (accession 0000935703-26-000025, filed 2026-03-16), 52 weeks ended 2026-01-31: GAAP operating income from continuing operations $1,653.1M / total revenue $19,411.8M = 8.52%. Adjusted operating income $1,664.1M (8.57%) adds back $15.5M of strategic-review costs and deducts a $4.5M reversal of software termination costs - immaterial, so GAAP is used. Includes $54.9M of 'transition services agreement income, net' from servicing Family Dollar after the sale (0.3% of revenue) - TRANSITIONAL, see the forecast margin note. Continuing-operations margin history: 10.57% FY2023 (53 weeks, before the multi-price conversions and tariffs), 8.32% FY2024 (8.9% adjusted; software impairments, the Marietta DC tornado, accelerated stock vesting), 8.52% FY2025 (tariff costs and higher markdowns offset by pricing). Operating leases: $1,510.0M of FY2025 lease cost ($1,131.9M fixed, $367.0M variable, $11.1M short-term; 10-K Note 7) sits inside cost of sales and SG&A, so this margin is AFTER rent - consistent with leaving operating-lease liabilities out of net debt (DG house approach). Not used to forecast (Year 1 is derived from guidance) but it is one leg of the cyclical peak test. CROSS-CHECK: H1 FY2026 GAAP operating margin 11.8% includes the $368.7M IEEPA tariff refund in cost of sales; excluding the net refund effect (refund less $22M of reinvestment markdowns, $15M of reinvestment SG&A and a $13M antidumping duty charge) H1 is ~8.56% vs 6.77% adjusted in H1 FY2025. |
| Forecast revenue growth | 6% → 6% → 6% → 5% → 4% | 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 | 0.72 | Yahoo Finance 5Y-monthly beta via yfinance (read 2026-10-06) + own regressions: Published 5Y-monthly beta 0.716, used AS PUBLISHED. My own regressions of yfinance adjusted monthly closes on the S&P 500 agree: 60-month 0.676, 120-month 0.742, 36-month 0.575 - so it is not a data artefact, and unlike DG's 0.226 there is no reason to normalize it. It sits in the middle of the discount/value-retail peers on the same feed (WMT 0.578, OLLI 0.414, BJ 0.166, FIVE 0.943, COST 0.87, TGT 0.981, DG 0.226); note the DG model in this tracker normalized DG UP to 0.58, so the two dollar stores are valued at broadly comparable discount rates (DLTR 8.3%, DG 7.7%). Cost of equity 5.24% + 0.716 x 5% = 8.82%. Each 0.1 of beta is worth roughly $9-11/share here: the peer median 0.58 gives $123.12, the 60-month regression 0.676 gives $112.95, 0.80 gives $101.86. The price is consistent with ~0.674 (WACC ~8.1%) on everything else held. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability. For Dollar Tree it is not generous: continuing revenue grew ~7.5% a year FY2023-FY2025 on store growth, pricing (the move beyond $1.25) and conversions of former Family Dollar sites, but in perpetuity a 9,400-store chain should track nominal consumer spending. 3.0% gives $118.37; 2.0% gives $101.38; the price is consistent with ~2.73%. Must remain < WACC of 8.32%. |
| Diluted shares | 191M | Dollar Tree Q2 FY2026 earnings release, 8-K Ex-99.1 (accession 0000935703-26-000108, filed 2026-08-27), 13 and 26 weeks ended 2026-08-01: Q2 FY2026 (13 weeks to 2026-08-01) weighted-average diluted shares 190.9M; H1 194.1M; FY2025 206.3M; FY2024 215.9M. The count is falling fast: Dollar Tree bought back $1,548M of stock in FY2025 and $1,208.9M (11.1M shares) in H1 FY2026, including $500M bought in the June 2026 block trade in which Mantle Ridge sold its stake; the board replenished the authorization to $2.5B on 2026-07-02 ($2.5B remaining at 2026-08-01). Shares outstanding were already 187.63M at 2026-08-25, so the weighted count overstates the current count by ~3.3M; using 187.63M would add ~$1.90/share. Further buybacks are NOT assumed. SBC was $58.9M in FY2025 (0.3% of revenue) and $40.7M in H1 FY2026. |
| Market price | $137.23 | Delayed quote · as of 2026-11-10 05:35 UTC |
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Most undervalued stocks (per our valuation) · Undervalued Consumer stocks · All valued stocks · Interactive DLTR 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.