Dollar Tree (DLTR) is drawing attention ahead of its next earnings release, as analysts anticipate a year-over-year decline in both earnings and revenue. At the same time, the retailer is shifting its store footprint by opening 81 new stores and closing 9 this quarter.

The latest moves by Dollar Tree follow a year that has seen its 1-year total shareholder return climb an impressive 55%, reflecting a wave of renewed investor attention. Despite some operational hurdles and a shifting store footprint, the recent momentum in the stock’s price suggests that optimism is building for the year ahead.

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With shares trading just below analyst price targets despite recent gains, investors are left to wonder if Dollar Tree remains undervalued or if the market has already priced in expectations for future growth.

Most Popular Narrative: 3.4% Overvalued

Dollar Tree’s last close price of $110.81 sits just above the fair value estimate from the most widely followed narrative. Investor debate is heating up as new assumptions spark fresh price targets.

The retailer's rapid rollout of multi-price point assortments beyond the historic $1.25 price cap has expanded average basket size and created margin uplift, while still retaining core value appeal. This provides a structural path to gross margin improvement and potential EPS growth.

Curious about the math behind this bold call? The fair value calculation rests on ambitious earnings forecasts, higher margins, and a future profit multiple that differs from past trends. Find out which assumptions tip the scale.

Result: Fair Value of $107.13 (OVERVALUED)

However, ongoing tariff volatility and rising labor costs could threaten Dollar Tree’s earnings outlook. These factors may potentially challenge analyst optimism in the months ahead.

Build Your Own Dollar Tree Narrative

If you have a different perspective or want to dig deeper into the numbers yourself, you can explore the data and shape your own story in just a few minutes. Do it your way

A great starting point for your Dollar Tree research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.