Intrinsic value of Dollar Tree - DLTR

Previous Close

$86.44

  Intrinsic Value

$105.41

stock screener

  Rating & Target

buy

+22%

Previous close

$86.44

 
Intrinsic value

$105.41

 
Up/down potential

+22%

 
Rating

buy

We calculate the intrinsic value of DLTR stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  33.69
  7.40
  7.16
  6.94
  6.75
  6.57
  6.42
  6.28
  6.15
  6.03
  5.93
  5.84
  5.75
  5.68
  5.61
  5.55
  5.49
  5.44
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
  5.21
  5.19
  5.17
  5.16
  5.14
  5.13
  5.11
Revenue, $m
  20,719
  23,892
  25,603
  27,381
  29,229
  31,151
  33,150
  35,230
  37,396
  39,652
  42,003
  44,455
  47,012
  49,682
  52,469
  55,380
  58,423
  61,604
  64,931
  68,411
  72,053
  75,866
  79,859
  84,041
  88,421
  93,012
  97,823
  102,865
  108,152
  113,696
  119,509
Variable operating expenses, $m
 
  19,218
  20,533
  21,900
  23,321
  24,798
  26,335
  27,934
  29,599
  31,334
  33,141
  34,175
  36,142
  38,194
  40,336
  42,575
  44,914
  47,359
  49,917
  52,592
  55,392
  58,324
  61,393
  64,608
  67,976
  71,504
  75,203
  79,080
  83,144
  87,406
  91,875
Fixed operating expenses, $m
 
  2,401
  2,453
  2,507
  2,563
  2,619
  2,677
  2,736
  2,796
  2,857
  2,920
  2,984
  3,050
  3,117
  3,186
  3,256
  3,327
  3,401
  3,475
  3,552
  3,630
  3,710
  3,791
  3,875
  3,960
  4,047
  4,136
  4,227
  4,320
  4,415
  4,512
Total operating expenses, $m
  19,014
  21,619
  22,986
  24,407
  25,884
  27,417
  29,012
  30,670
  32,395
  34,191
  36,061
  37,159
  39,192
  41,311
  43,522
  45,831
  48,241
  50,760
  53,392
  56,144
  59,022
  62,034
  65,184
  68,483
  71,936
  75,551
  79,339
  83,307
  87,464
  91,821
  96,387
Operating income, $m
  1,705
  2,273
  2,616
  2,973
  3,345
  3,733
  4,138
  4,560
  5,001
  5,461
  5,942
  7,295
  7,821
  8,371
  8,947
  9,550
  10,182
  10,844
  11,539
  12,267
  13,031
  13,833
  14,674
  15,558
  16,486
  17,460
  18,483
  19,558
  20,688
  21,875
  23,122
EBITDA, $m
  2,343
  4,381
  4,813
  5,264
  5,733
  6,222
  6,732
  7,264
  7,818
  8,397
  9,002
  9,633
  10,294
  10,984
  11,707
  12,463
  13,255
  14,085
  14,954
  15,865
  16,821
  17,823
  18,875
  19,979
  21,137
  22,352
  23,629
  24,969
  26,377
  27,855
  29,408
Interest expense (income), $m
  329
  307
  343
  381
  420
  461
  504
  548
  595
  643
  693
  745
  799
  856
  916
  977
  1,042
  1,110
  1,180
  1,254
  1,331
  1,412
  1,497
  1,586
  1,678
  1,776
  1,878
  1,984
  2,096
  2,214
  2,337
Earnings before tax, $m
  1,329
  1,967
  2,273
  2,592
  2,925
  3,272
  3,634
  4,012
  4,406
  4,818
  5,249
  6,550
  7,021
  7,515
  8,031
  8,573
  9,140
  9,735
  10,358
  11,013
  11,700
  12,421
  13,178
  13,972
  14,807
  15,684
  16,606
  17,574
  18,592
  19,661
  20,785
Tax expense, $m
  433
  531
  614
  700
  790
  883
  981
  1,083
  1,190
  1,301
  1,417
  1,768
  1,896
  2,029
  2,168
  2,315
  2,468
  2,628
  2,797
  2,973
  3,159
  3,354
  3,558
  3,773
  3,998
  4,235
  4,484
  4,745
  5,020
  5,308
  5,612
Net income, $m
  896
  1,436
  1,659
  1,892
  2,135
  2,389
  2,653
  2,929
  3,217
  3,517
  3,832
  4,781
  5,126
  5,486
  5,863
  6,258
  6,672
  7,106
  7,562
  8,039
  8,541
  9,067
  9,620
  10,200
  10,809
  11,450
  12,122
  12,829
  13,572
  14,353
  15,173

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  870
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  15,702
  17,542
  18,798
  20,103
  21,460
  22,871
  24,339
  25,866
  27,456
  29,113
  30,839
  32,639
  34,517
  36,477
  38,523
  40,661
  42,895
  45,230
  47,673
  50,228
  52,903
  55,702
  58,634
  61,704
  64,920
  68,291
  71,823
  75,525
  79,407
  83,477
  87,745
Adjusted assets (=assets-cash), $m
  14,832
  17,542
  18,798
  20,103
  21,460
  22,871
  24,339
  25,866
  27,456
  29,113
  30,839
  32,639
  34,517
  36,477
  38,523
  40,661
  42,895
  45,230
  47,673
  50,228
  52,903
  55,702
  58,634
  61,704
  64,920
  68,291
  71,823
  75,525
  79,407
  83,477
  87,745
Revenue / Adjusted assets
  1.397
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
  1.362
Average production assets, $m
  6,226
  12,567
  13,467
  14,402
  15,374
  16,385
  17,437
  18,531
  19,670
  20,857
  22,094
  23,383
  24,728
  26,133
  27,599
  29,130
  30,730
  32,404
  34,154
  35,984
  37,900
  39,906
  42,006
  44,205
  46,510
  48,924
  51,455
  54,107
  56,888
  59,804
  62,862
Working capital, $m
  1,832
  2,150
  2,304
  2,464
  2,631
  2,804
  2,983
  3,171
  3,366
  3,569
  3,780
  4,001
  4,231
  4,471
  4,722
  4,984
  5,258
  5,544
  5,844
  6,157
  6,485
  6,828
  7,187
  7,564
  7,958
  8,371
  8,804
  9,258
  9,734
  10,233
  10,756
Total debt, $m
  6,446
  6,351
  7,054
  7,785
  8,545
  9,335
  10,157
  11,012
  11,903
  12,830
  13,797
  14,805
  15,857
  16,954
  18,100
  19,297
  20,548
  21,856
  23,224
  24,655
  26,153
  27,720
  29,362
  31,081
  32,883
  34,770
  36,748
  38,821
  40,995
  43,274
  45,665
Total liabilities, $m
  10,312
  9,824
  10,527
  11,258
  12,018
  12,808
  13,630
  14,485
  15,376
  16,303
  17,270
  18,278
  19,330
  20,427
  21,573
  22,770
  24,021
  25,329
  26,697
  28,128
  29,625
  31,193
  32,835
  34,554
  36,355
  38,243
  40,221
  42,294
  44,468
  46,747
  49,137
Total equity, $m
  5,390
  7,718
  8,271
  8,845
  9,443
  10,063
  10,709
  11,381
  12,081
  12,810
  13,569
  14,361
  15,188
  16,050
  16,950
  17,891
  18,874
  19,901
  20,976
  22,100
  23,277
  24,509
  25,799
  27,150
  28,565
  30,048
  31,602
  33,231
  34,939
  36,730
  38,608
Total liabilities and equity, $m
  15,702
  17,542
  18,798
  20,103
  21,461
  22,871
  24,339
  25,866
  27,457
  29,113
  30,839
  32,639
  34,518
  36,477
  38,523
  40,661
  42,895
  45,230
  47,673
  50,228
  52,902
  55,702
  58,634
  61,704
  64,920
  68,291
  71,823
  75,525
  79,407
  83,477
  87,745
Debt-to-equity ratio
  1.196
  0.820
  0.850
  0.880
  0.900
  0.930
  0.950
  0.970
  0.990
  1.000
  1.020
  1.030
  1.040
  1.060
  1.070
  1.080
  1.090
  1.100
  1.110
  1.120
  1.120
  1.130
  1.140
  1.140
  1.150
  1.160
  1.160
  1.170
  1.170
  1.180
  1.180
Adjusted equity ratio
  0.305
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  896
  1,436
  1,659
  1,892
  2,135
  2,389
  2,653
  2,929
  3,217
  3,517
  3,832
  4,781
  5,126
  5,486
  5,863
  6,258
  6,672
  7,106
  7,562
  8,039
  8,541
  9,067
  9,620
  10,200
  10,809
  11,450
  12,122
  12,829
  13,572
  14,353
  15,173
Depreciation, amort., depletion, $m
  638
  2,107
  2,197
  2,291
  2,388
  2,489
  2,594
  2,704
  2,818
  2,936
  3,060
  2,338
  2,473
  2,613
  2,760
  2,913
  3,073
  3,240
  3,415
  3,598
  3,790
  3,991
  4,201
  4,421
  4,651
  4,892
  5,145
  5,411
  5,689
  5,980
  6,286
Funds from operations, $m
  1,811
  3,543
  3,857
  4,183
  4,523
  4,878
  5,247
  5,632
  6,034
  6,454
  6,892
  7,120
  7,598
  8,099
  8,623
  9,171
  9,745
  10,347
  10,977
  11,638
  12,331
  13,058
  13,820
  14,620
  15,460
  16,342
  17,268
  18,240
  19,261
  20,333
  21,459
Change in working capital, $m
  138
  148
  154
  160
  166
  173
  180
  187
  195
  203
  212
  221
  230
  240
  251
  262
  274
  286
  299
  313
  328
  343
  359
  376
  394
  413
  433
  454
  476
  499
  523
Cash from operations, $m
  1,673
  3,395
  3,703
  4,023
  4,357
  4,705
  5,067
  5,445
  5,839
  6,250
  6,680
  6,899
  7,368
  7,859
  8,372
  8,909
  9,471
  10,060
  10,678
  11,325
  12,003
  12,714
  13,461
  14,244
  15,066
  15,929
  16,835
  17,786
  18,785
  19,834
  20,936
Maintenance CAPEX, $m
  0
  -1,171
  -1,257
  -1,347
  -1,440
  -1,537
  -1,639
  -1,744
  -1,853
  -1,967
  -2,086
  -2,209
  -2,338
  -2,473
  -2,613
  -2,760
  -2,913
  -3,073
  -3,240
  -3,415
  -3,598
  -3,790
  -3,991
  -4,201
  -4,421
  -4,651
  -4,892
  -5,145
  -5,411
  -5,689
  -5,980
New CAPEX, $m
  -566
  -858
  -900
  -935
  -972
  -1,011
  -1,051
  -1,094
  -1,139
  -1,187
  -1,237
  -1,290
  -1,345
  -1,404
  -1,466
  -1,531
  -1,600
  -1,673
  -1,750
  -1,831
  -1,916
  -2,006
  -2,100
  -2,200
  -2,304
  -2,415
  -2,531
  -2,653
  -2,781
  -2,916
  -3,058
Cash from investing activities, $m
  -484
  -2,029
  -2,157
  -2,282
  -2,412
  -2,548
  -2,690
  -2,838
  -2,992
  -3,154
  -3,323
  -3,499
  -3,683
  -3,877
  -4,079
  -4,291
  -4,513
  -4,746
  -4,990
  -5,246
  -5,514
  -5,796
  -6,091
  -6,401
  -6,725
  -7,066
  -7,423
  -7,798
  -8,192
  -8,605
  -9,038
Free cash flow, $m
  1,189
  1,366
  1,546
  1,741
  1,945
  2,156
  2,377
  2,607
  2,847
  3,097
  3,358
  3,400
  3,685
  3,982
  4,293
  4,618
  4,958
  5,314
  5,687
  6,079
  6,489
  6,919
  7,370
  7,844
  8,341
  8,863
  9,412
  9,988
  10,593
  11,229
  11,898
Issuance/(repayment) of debt, $m
  -1,074
  673
  703
  731
  760
  790
  822
  855
  891
  928
  967
  1,008
  1,052
  1,098
  1,146
  1,197
  1,251
  1,308
  1,368
  1,431
  1,498
  1,568
  1,642
  1,719
  1,801
  1,887
  1,978
  2,073
  2,174
  2,279
  2,390
Issuance/(repurchase) of shares, $m
  42
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -1,061
  673
  703
  731
  760
  790
  822
  855
  891
  928
  967
  1,008
  1,052
  1,098
  1,146
  1,197
  1,251
  1,308
  1,368
  1,431
  1,498
  1,568
  1,642
  1,719
  1,801
  1,887
  1,978
  2,073
  2,174
  2,279
  2,390
Total cash flow (excl. dividends), $m
  130
  2,039
  2,250
  2,472
  2,704
  2,947
  3,199
  3,462
  3,737
  4,024
  4,324
  4,408
  4,736
  5,079
  5,439
  5,815
  6,209
  6,622
  7,055
  7,510
  7,986
  8,487
  9,012
  9,563
  10,142
  10,751
  11,390
  12,061
  12,767
  13,509
  14,288
Retained Cash Flow (-), $m
  -983
  -536
  -553
  -574
  -597
  -621
  -646
  -672
  -700
  -729
  -760
  -792
  -826
  -862
  -900
  -941
  -983
  -1,028
  -1,075
  -1,124
  -1,177
  -1,232
  -1,290
  -1,351
  -1,415
  -1,483
  -1,554
  -1,629
  -1,708
  -1,791
  -1,878
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  67
  72
  77
  82
  88
  93
  99
  106
  112
  119
  126
  133
  141
  149
  157
  166
  175
  185
  195
  205
  216
  228
  240
  252
  265
  279
  293
  309
  324
  341
Cash available for distribution, $m
 
  1,502
  1,697
  1,898
  2,107
  2,326
  2,553
  2,790
  3,038
  3,296
  3,565
  3,616
  3,910
  4,217
  4,538
  4,874
  5,226
  5,594
  5,980
  6,385
  6,810
  7,255
  7,722
  8,212
  8,727
  9,268
  9,836
  10,432
  11,059
  11,718
  12,410
Discount rate, %
 
  6.10
  6.41
  6.73
  7.06
  7.41
  7.79
  8.17
  8.58
  9.01
  9.46
  9.94
  10.43
  10.95
  11.50
  12.08
  12.68
  13.32
  13.98
  14.68
  15.41
  16.19
  16.99
  17.84
  18.74
  19.67
  20.66
  21.69
  22.77
  23.91
  25.11
PV of cash for distribution, $m
 
  1,416
  1,499
  1,561
  1,604
  1,626
  1,628
  1,610
  1,572
  1,516
  1,443
  1,276
  1,188
  1,092
  988
  881
  774
  668
  567
  473
  387
  311
  244
  188
  142
  104
  75
  52
  35
  23
  15
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Dollar Tree, Inc. is an operator of discount variety stores. As of January 28, 2017, the Company operated 14,334 stores in 48 states and the District of Columbia, and five Canadian provinces. Its segments include Dollar Tree and Family Dollar. The Dollar Tree segment is the operator of discount variety stores offering merchandise at a fixed price. The Family Dollar segment operates a chain of general merchandise retail discount stores providing consumers with a selection of merchandise in neighborhood stores. Its stores operate under the names of Dollar Tree, Family Dollar and Dollar Tree Canada. As of January 28, 2017, the Dollar Tree segment included 6,360 stores operating under the Dollar Tree and Dollar Tree Canada brands, 11 distribution centers in the United States and two in Canada and a Store Support Center in Chesapeake, Virginia, and 11 distribution centers and a Store Support Center in Matthews, North Carolina under the Family Dollar brand.

FINANCIAL RATIOS  of  Dollar Tree (DLTR)

Valuation Ratios
P/E Ratio 22.8
Price to Sales 1
Price to Book 3.8
Price to Tangible Book
Price to Cash Flow 12.2
Price to Free Cash Flow 18.4
Growth Rates
Sales Growth Rate 33.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 17.7%
Cap. Spend. - 3 Yr. Gr. Rate 11.3%
Financial Strength
Quick Ratio 6
Current Ratio 0
LT Debt to Equity 116.8%
Total Debt to Equity 119.6%
Interest Coverage 5
Management Effectiveness
Return On Assets 7.1%
Ret/ On Assets - 3 Yr. Avg. 11%
Return On Total Capital 7.5%
Ret/ On T. Cap. - 3 Yr. Avg. 12.9%
Return On Equity 18.3%
Return On Equity - 3 Yr. Avg. 22.6%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 30.9%
Gross Margin - 3 Yr. Avg. 32.1%
EBITDA Margin 11.1%
EBITDA Margin - 3 Yr. Avg. 11.4%
Operating Margin 8.2%
Oper. Margin - 3 Yr. Avg. 9%
Pre-Tax Margin 6.4%
Pre-Tax Margin - 3 Yr. Avg. 6.8%
Net Profit Margin 4.3%
Net Profit Margin - 3 Yr. Avg. 4.4%
Effective Tax Rate 32.6%
Eff/ Tax Rate - 3 Yr. Avg. 35.6%
Payout Ratio 0%

DLTR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DLTR stock intrinsic value calculation we used $22246 million for the last fiscal year's total revenue generated by Dollar Tree. The default revenue input number comes from 2017 income statement of Dollar Tree. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our DLTR stock valuation model: a) initial revenue growth rate of 7.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.1%, whose default value for DLTR is calculated based on our internal credit rating of Dollar Tree, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Dollar Tree.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of DLTR stock the variable cost ratio is equal to 80.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2349 million in the base year in the intrinsic value calculation for DLTR stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Dollar Tree.

Corporate tax rate of 27% is the nominal tax rate for Dollar Tree. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the DLTR stock is equal to 0.3%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for DLTR are equal to 52.6%.

Life of production assets of 10 years is the average useful life of capital assets used in Dollar Tree operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for DLTR is equal to 9%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $7182 million for Dollar Tree - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 237 million for Dollar Tree is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Dollar Tree at the current share price and the inputted number of shares is $20.5 billion.

RELATED COMPANIES Price Int.Val. Rating
DG Dollar General 98.17 98.06  hold
FRED Fred's 2.20 1.42  sell
BIG Big Lots 43.37 43.37  hold
FIVE Five Below 102.94 98.79  buy
TGT Target 77.76 81.40  hold
TUES Tuesday Mornin 2.73 1.13  str.sell
WMT Walmart 88.06 68.29  sell

COMPANY NEWS

▶ 7 Recession-Proof Stocks to Buy for When the Boom Ends   [Jul-20-18 10:40AM  InvestorPlace]
▶ [$$] These Are the Retail Brands That Will Be Hurt Most by Chinese Tariffs   [Jul-16-18 09:56AM  The Wall Street Journal]
▶ Family Dollar wants to sell you booze in Cincinnati   [Jul-11-18 02:14PM  American City Business Journals]
▶ Why Dollar Tree Stock Has Lost 21% in 2018   [Jul-09-18 11:24AM  Motley Fool]
▶ Could Dollar Tree Branch Out Into M&A?   [Jun-28-18 11:26AM  Barrons.com]
▶ Bedrin adds to its collection of Triad shopping centers   [Jun-26-18 02:27PM  American City Business Journals]
▶ Insiders Snap Up Dollar Tree Shares   [Jun-20-18 03:11PM  Barrons.com]
▶ Why Dollar Tree, Inc. Stock Sank 14% Last Month   [Jun-12-18 05:50PM  Motley Fool]
▶ Five Below Inc Isnt Your Ordinary Retail Stock   [Jun-07-18 12:50PM  InvestorPlace]
▶ [$$] Mea Culpa on Dollar Tree   [12:01AM  Barrons.com]
▶ Company News For June 1, 2018   [09:51AM  Zacks]
▶ Why Dollar Tree, Inc. Stock Plunged Today   [May-31-18 08:39PM  Motley Fool]
▶ [$$] Good Times Mean Tough Times for Dollar Stores   [02:00PM  The Wall Street Journal]
▶ [$$] Dollar Tree Lowers Full-Year Outlook   [08:58AM  The Wall Street Journal]
▶ [$$] Dollar Tree, Dollar General sales chilled by cold spring   [May-30-18 11:57PM  Financial Times]
▶ Two anchor stores joining Bradshaw Road retail center   [May-29-18 05:35PM  American City Business Journals]
▶ A Look At The Fair Value Of Dollar Tree Inc (NASDAQ:DLTR)   [May-28-18 08:57AM  Simply Wall St.]
▶ [$$] Retail's Next Surprise   [May-26-18 12:01AM  Barrons.com]
▶ Trade-led rally makes sense   [May-21-18 07:09PM  CNBC Videos]
▶ Rising stars slash debt costs in robust US economy   [May-17-18 01:48PM  Reuters]
▶ MARKETS: Stocks are setting up for another huge drop   [May-03-18 01:34PM  Yahoo Finance Video]
▶ MARKETS: Price inflation just hit the Federal Reserve's magic number   [Apr-30-18 10:56AM  Yahoo Finance Video]
▶ Walmart's New Strategy Could Hurt These Popular Stores   [Apr-22-18 09:30AM  Motley Fool]
▶ 6 Most Undervalued Stocks In Chuck Akre's Portfolio   [Apr-19-18 10:27AM  Benzinga]
▶ Why Dollar Tree Could Turn a New Leaf   [10:46AM  Barrons.com]
▶ Walmart takes on dollar stores with lower prices   [Apr-17-18 08:44AM  MarketWatch]
▶ Walmart's Lower Prices Could Undercut Discounters   [Apr-16-18 10:37AM  Barrons.com]
▶ MARKETS: Corona owner delivers Wall Street a quarter-end surprise   [Mar-29-18 11:08AM  Yahoo Finance Video]
▶ 3 Resilient Retailers Amazon Can't Touch   [Mar-22-18 11:05AM  Motley Fool]
▶ [$$] In Battle of the Discounters, Dollar General Gains an Edge   [Mar-15-18 02:29PM  The Wall Street Journal]
Financial statements of DLTR
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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