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Dollar General (DG) Stock Sinks As Market Gains: What You Should Know

Dollar General (DG) closed at $213.09 in the latest trading session, marking a -0.38% move from the prior day. This change lagged the S&P 500's daily gain of 1.17%. Meanwhile, the Dow gained 1.6%, and the Nasdaq, a tech-heavy index, added 0.8%.

Heading into today, shares of the discount retailer had lost 4.02% over the past month, lagging the Retail-Wholesale sector's loss of 4% and the S&P 500's gain of 2.26% in that time.

Wall Street will be looking for positivity from DG as it approaches its next earnings report date. This is expected to be December 3, 2020. In that report, analysts expect DG to post earnings of $1.97 per share. This would mark year-over-year growth of 38.73%. Meanwhile, our latest consensus estimate is calling for revenue of $8 billion, up 14.39% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.16 per share and revenue of $32.92 billion. These totals would mark changes of +50.97% and +18.63%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for DG. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.78% higher. DG is holding a Zacks Rank of #2 (Buy) right now.

Digging into valuation, DG currently has a Forward P/E ratio of 21.06. For comparison, its industry has an average Forward P/E of 22.37, which means DG is trading at a discount to the group.

Investors should also note that DG has a PEG ratio of 1.9 right now. 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 3.1 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 130, putting it in the bottom 49% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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