Value
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.5 |
| P/S | 9.9 |
| EV/EBITDA | 4.8 |
| Fwd P/E | 7.8 |
| PEG | 4.7 |
| Analyst target | 5.0 |
- ▸Forward P/E: 15.5x
- ▸PEG: 1.83
DG · Why this verdict
Why Dollar General (DG) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.7/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Dollar General has posted four consecutive earnings beats with an average positive surprise above 20%, demonstrating consistent execution discipline — but the stock has effectively reached its analyst consensus price target with only 1.5% upside remaining, the RSI reads 74 signaling overbought conditions in what is characterized as a bear-rally move, the options market reflects elevated downside hedging at a put/call ratio of 7.06, and 82% of sales are concentrated in consumables — at current levels the setup offers almost no reward for the risk of holding.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Consumables represent 82% of the product mix, concentrating revenue in a single category — a structure that limits pricing power and leaves the business highly exposed to cost-of-goods pressures in a narrow product set with no meaningful diversifying revenue offset. Bear case | Consumables' share of total sales falls below 75% from the current 82%, indicating meaningful progress in expanding into adjacent categories and reducing reliance on a single product type. | ↓Deteriorating |
| CounterA high consumables concentration reflects the core of the value proposition — price-sensitive consumers consistently repurchasing necessities — and may represent a deliberate structural feature rather than a correctable risk. | ||
The company has beaten the consensus earnings estimate in each of the last four quarters with an average positive surprise above 20%, including a 38% beat in the third-most-recent quarter — a pattern consistent with management consistently under-promising and over-delivering relative to analyst expectations. Earnings | Earnings per share continues to beat the consensus estimate by at least 5% per quarter over the next 12 months, sustaining the four-quarter beat streak. | ↓Deteriorating |
| CounterAs the beat streak extends and analysts re-calibrate their models upward, the structural gap between guidance and delivery is likely to narrow — the same discipline that produced 20% average surprises may yield progressively smaller beats as estimates catch up. | ||
The stock has effectively reached the analyst consensus price target, leaving only 1.5% of potential upside against meaningful downside — a risk/reward ratio of 0.21-to-1 that makes new exposure unattractive regardless of the fundamental story. Price targets | Upside to the consensus price target recovers to above 10% from the current 1.5% through either a price pullback or an upward revision to analyst targets, restoring a credible reward-to-risk margin. | ↑Improving |
| CounterA continued strong earnings beat streak could prompt a wave of analyst target upgrades, widening the upside gap without requiring any price decline and making the current entry more defensible in retrospect. | ||
The RSI of 74 signals overbought conditions in what is characterized as a bear-rally move, and the options put/call ratio of 7.06 reflects unusually elevated downside hedging — together these signals suggest near-term price action has outrun the fundamental recovery and institutional participants are protecting against a reversal. Risk breakdown | RSI reverts below 50 and the put/call ratio declines below 2.0 for at least 4 consecutive weeks, signaling that overbought conditions have normalized and hedging activity has unwound. | ↓Deteriorating |
| CounterOverbought readings in a genuine turnaround can persist for extended periods as momentum attracts additional buyers; a high put/call ratio may also partly reflect covered call writing rather than pure downside hedging, overstating the pessimism implied. | ||
Consumables represent 82% of the product mix, concentrating revenue in a single category — a structure that limits pricing power and leaves the business highly exposed to cost-of-goods pressures in a narrow product set with no meaningful diversifying revenue offset.
↓DeterioratingBear case
- Expectation
- Consumables' share of total sales falls below 75% from the current 82%, indicating meaningful progress in expanding into adjacent categories and reducing reliance on a single product type.
CounterA high consumables concentration reflects the core of the value proposition — price-sensitive consumers consistently repurchasing necessities — and may represent a deliberate structural feature rather than a correctable risk.
The company has beaten the consensus earnings estimate in each of the last four quarters with an average positive surprise above 20%, including a 38% beat in the third-most-recent quarter — a pattern consistent with management consistently under-promising and over-delivering relative to analyst expectations.
↓DeterioratingEarnings
- Expectation
- Earnings per share continues to beat the consensus estimate by at least 5% per quarter over the next 12 months, sustaining the four-quarter beat streak.
CounterAs the beat streak extends and analysts re-calibrate their models upward, the structural gap between guidance and delivery is likely to narrow — the same discipline that produced 20% average surprises may yield progressively smaller beats as estimates catch up.
The stock has effectively reached the analyst consensus price target, leaving only 1.5% of potential upside against meaningful downside — a risk/reward ratio of 0.21-to-1 that makes new exposure unattractive regardless of the fundamental story.
↑ImprovingPrice targets
- Expectation
- Upside to the consensus price target recovers to above 10% from the current 1.5% through either a price pullback or an upward revision to analyst targets, restoring a credible reward-to-risk margin.
CounterA continued strong earnings beat streak could prompt a wave of analyst target upgrades, widening the upside gap without requiring any price decline and making the current entry more defensible in retrospect.
The RSI of 74 signals overbought conditions in what is characterized as a bear-rally move, and the options put/call ratio of 7.06 reflects unusually elevated downside hedging — together these signals suggest near-term price action has outrun the fundamental recovery and institutional participants are protecting against a reversal.
↓DeterioratingRisk breakdown
- Expectation
- RSI reverts below 50 and the put/call ratio declines below 2.0 for at least 4 consecutive weeks, signaling that overbought conditions have normalized and hedging activity has unwound.
CounterOverbought readings in a genuine turnaround can persist for extended periods as momentum attracts additional buyers; a high put/call ratio may also partly reflect covered call writing rather than pure downside hedging, overstating the pessimism implied.
Per-dimension breakdown
Quality
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.6 |
| ROA | 3.3 |
| Gross margin | 2.2 |
| Op margin | 2.7 |
| Net margin | 2.0 |
| Current ratio | 4.6 |
| FCF quality | 7.1 |
| Moat | 4.8 |
| Piotroski F | 7.8 |
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
6.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.8 |
| EPS growth | 8.7 |
Momentum
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 4.2 |
| Volume | 3.3 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+3.0%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 8.4 |
| Analyst rating | 7.5 |
| Price target | 6.7 |
- ▸LLM news sentiment: +0.67 (n=2)
Insider
6.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 7.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.1 |
| quality rank | 4.4 |
| growth rank | 0.0 |
Technical
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.2 |
| support resistance | 5.7 |
| 52w position | 5.9 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.3 |
| days to cover | 7.7 |
| volatility | 3.6 |
| put call | 2.6 |
| implied vol | 6.3 |
| beta | 10.0 |
| debt equity | 3.6 |
- ▸Elevated put/call: 1.60
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 8.0 |
| news activity | 6.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend aristocrat: 1.8% yield
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position. | News modifier +2 (SELL_IF_HOLDING → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_SELL|L3:NEWS_MOD=+2Passed (6)
- MOMENTUM:4.6>=4.5
- INSIDER:OK
- NEWS_BOOST:ANALYST:0.60
- EARNINGS_PROXIMITY:84d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.1<1.5@spot
Warning (2)
- MOMENTUM:4.6<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.05
Upside
+0.4%
Downside
7.1%
Sizing output
AVOID
SetupRange Bound — RSI 53 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.0 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.1<1.5@spot) reinforce the read. Current asymmetry R:R is 0.05 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.6, Catalyst at 7.3, and Value at 6.5; the weakest are Peer rank at 3.4, Momentum at 4.6, and Quality at 4.6. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 0.05 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Earnings Execution
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Upside Exhausted At Target
Trip ifUpside to take-profit target exceeds 10% from the current 1.5% remaining.
- P3Overbought Elevated Hedging
Trip ifRSI falls below 50 and put/call ratio declines below 2.0 for 4 consecutive weeks.
- P4Consumables Concentration Risk
Trip ifConsumables share of total sales falls below 75% from the current 82%.