Dollar General (DG) Gains But Lags Market: What You Should Know

In the latest trading session, Dollar General (DG) closed at $246.35, marking a +0.37% move from the previous day. This change lagged the S&P 500's 1.06% gain on the day. Meanwhile, the Dow gained 1.05%, and the Nasdaq, a tech-heavy index, added 0.4%.

Heading into today, shares of the discount retailer had gained 9.22% over the past month, outpacing the Retail-Wholesale sector's loss of 6.15% and the S&P 500's loss of 8.3% in that time.

Dollar General will be looking to display strength as it nears its next earnings release. On that day, Dollar General is projected to report earnings of $2.90 per share, which would represent year-over-year growth of 7.81%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.35 billion, up 8.07% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $11.48 per share and revenue of $37.6 billion, which would represent changes of +12.88% and +9.87%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Dollar General. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.13% higher. Dollar General is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Dollar General has a Forward P/E ratio of 21.37 right now. For comparison, its industry has an average Forward P/E of 19.12, which means Dollar General is trading at a premium to the group.

Also, we should mention that DG has a PEG ratio of 1.76. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Retail - Discount Stores stocks are, on average, holding a PEG ratio of 1.67 based on yesterday's closing prices.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 213, putting it in the bottom 16% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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