Dollarama’s Fundamental Analysis is Very Bullish

Dollarama Stock Analysis

The AI-assisted stock analysis for Dollarama Inc provides a comprehensive overview of the company’s current standing and potential future performance:

Positive Fundamentals

1. Low Debt: Dollarama Inc is less leveraged compared to its peers, placing it in the top quartile for debt management. This lower debt burden provides the company with greater financial flexibility.
2. Underpriced on Cash Flow Basis: The stock is trading at a lower price compared to its peers based on cash flow metrics, suggesting it may be undervalued. This presents a potential opportunity for investors, although it’s essential to verify the company’s financial performance.
3. Low Volatility: Dollarama Inc demonstrates stable and consistent annual returns compared to its sector peers, indicating lower volatility. While stability is beneficial, it’s important to consider that it may limit potential returns.
4. Superior Risk Adjusted Returns: The company has delivered strong risk-adjusted returns compared to its sector peers over a hold period of at least 12 months, placing it in the top quartile for performance.
5. Underpriced Compared to Book Value: Dollarama Inc’s stock is trading at a lower price relative to its book value compared to its peers, suggesting potential undervaluation.
6. Positive Cash Flow and Free Cash Flow: Dollarama Inc has generated positive total cash flow and free cash flow in the most recent four quarters, indicating healthy financial operations.
7. Superior Return on Assets and Capital Utilization: The company’s management has demonstrated better return on assets and invested capital compared to its peers, placing it in the top quartile for efficiency.
8. Superior Total Returns and Revenue Growth: Dollarama Inc has outperformed its sector peers in terms of total returns and revenue growth over the past five years, positioning it favorably for future growth.
9. Superior Earnings Growth and Return on Equity: The company has shown top quartile earnings growth and return on equity in recent quarters, reflecting strong financial performance.
10. High Market Capitalization: Dollarama Inc is among the largest entities in its sector, indicating stability and market dominance.
11. High Gross Profit to Asset Ratio and Dividend Growth: The company exhibits a high gross profit to asset ratio and has shown top quartile dividend growth over the past five years, appealing to value investors seeking superior returns.
12. High Dividend Returns: Dollarama Inc has outperformed its sector peers in terms of average annual dividend returns over the past five years, making it attractive for investors seeking high income yields.

Positive Fundamentals

There are no specific negative factors highlighted in the analysis, indicating overall positive sentiment toward Dollarama Inc.

DOL Stock Analysis & Forecast

1. Average Analyst Target Price: Based on forecasts from 9 analysts, the average target price for Dollarama Inc’s stock over the next 12 months is CAD 103.91. This indicates optimism among analysts regarding the company’s future performance.
2. Average Analyst Rating: Dollarama Inc’s average analyst rating is “Buy,” reflecting analysts’ recommendation to purchase the stock. This consensus suggests confidence in the company’s growth prospects and overall business outlook.
3. Stock Target Advisor Analysis: Stock Target Advisor’s own analysis of Dollarama Inc is “Very Bullish.” This assessment is based on 19 positive signals and 0 negative signals, indicating a strong bullish sentiment surrounding the stock.
4. Recent Stock Performance: At the last closing, Dollarama Inc’s stock price was CAD 100.36. However, the stock price has experienced a decline of -4.10% over the past week and -3.74% over the past month. Despite these short-term fluctuations, the stock has demonstrated significant growth of +24.10% over the last year, indicating strong performance over the long term.