What changed
$DLTR — AVOID 📊 | 6 MONTHS THESIS
🧭 Conviction: HIGH
🎯 FQ1 FY2027 (ends Apr) | reported May 28 | Rev $5.0B | EPS $1.74 vs $1.53 🟢 | Margin 9.5%
💡 The market may be extrapolating the 13.7% earnings beat, but underlying demand is flat ($5B revenue) and margin gains could reverse as competition and cost pressures persist.
🏢 Business Quality: 5/10
📊 Valuation: rich — 17.8x trailing P/E is in line with staples, but Price/FCF of 39x and estimated EV/EBITDA over 20x signal overvaluation relative to peers and...
🔮 Catalyst: Q2 FY2027 earnings (est. Aug 2026)
⚖️ Avoid DLTR at $124 — rich on free cash flow, no near-term catalyst, and weak quantitative standing; capital is better deployed elsewhere.