Based in Goodlettsville, Tennessee, Dollar General Corporation (DG) ranks among the largest discount retailers in the U.S., valued at a market capitalization of $16.9 billion. The company serves millions of customers by offering affordable and convenient shopping solutions, focusing primarily on rural and underserved areas.
Companies valued at $10 billion or more are generally described as "large-cap stocks," and Dollar General is a prime example of this. DG maintains a strong competitive position through its expansive network of over 18,000 stores, primarily located in rural and underserved communities. Its focus on affordability, convenience, and a streamlined store format allows it to attract cost-conscious consumers.
DG shares are trading 55.2% below their 52-week high of $168.07, which they hit on Mar. 14. The stock has declined 12.2% over the past three months, underperforming the Dow Jones Industrials Average’s ($DOWI) 5% gains during the same time frame.
In the longer term, DG is down 44.6% on a YTD basis, and the shares have declined by 42.1% over the past 52 weeks. In comparison, the DOWI has gained 16% in 2024 and rallied 17.2% over the past year.
To confirm its bearish trend, DG has been trading below its 50-day and the 200-day moving averages since mid-June.
Dollar General's recent underperformance is largely due to margin pressure and tough consumer conditions. The company has struggled with decreased consumer spending and intensified competition from major retailers. Additionally, Donald Trump's presidency is linked to concerns over potential import tariffs on Chinese goods, which could raise costs for DG and further pressure the stock.
However, the stock popped 4.5% on Dec. 6 after the company announced its Q3 earnings. The dollar store chain reported earnings of $0.89 per share, slightly missing Wall Street’s $0.94 estimate. However, it surpassed revenue expectations, posting $10.2 billion.
Highlighting the contrast in performance, DG's competitor, Dollar Tree, Inc. (DLTR), has underperformed both the stock and DOWI. DLTR has declined 50.7% on a YTD basis and fallen 46.5% over the past 52 weeks.
Analysts are somewhat bullish about DG's prospects despite the weak price performance. The stock has a consensus rating of "Moderate Buy" from 28 analysts in coverage. The mean price target is $90.89, suggesting a premium of 20.8% to its current levels.
