Dollar General Stock at Support Zone – Bargain or Trap?
Dollar General (DG) stock should be on your watchlist. Here is why – it is currently trading in the support zone ($119.03 – $131.55), levels from which it has bounced meaningfully before. In the last 10 years, Dollar General stock received buying interest at this level 4 times and subsequently went on to generate 46.9% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 1/9/2019 | 4.5% | 63 |
| 3/18/2019 | 8.7% | 38 |
| 5/14/2019 | 128.5% | 1263 |
| 10/13/2023 | 45.7% | 151 |
Yet, a support zone alone isn’t enough; rebounds are more likely when fundamentals, sentiment, and market conditions line up. How does that look for DG?
Likely Rebound Initiated, Supported by Strong Fundamentals
Dollar General’s Q3 2025 results showcased significant strength, with EPS surging 43.8% and same-store sales up 2.5% driven by traffic. Gross margin expanded 107 basis points due to higher markups and lower shrink. Management elevated full-year 2025 EPS guidance to $6.30-$6.50, signaling confidence. Analysts responded with price target increases, with Jefferies raising to $142 and maintaining a Buy. The discount retail sector benefits from persistent value-seeking consumer behavior amidst economic pressures, driving market share gains for DG. Aggressive store expansion and remodels (450 new, 4,250 remodels in 2026) further underpin growth prospects. This fundamental strength and market tailwinds strongly suggest sustained upside.
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How Do DG Financials Look Right Now?
- Revenue Growth: 5.0% LTM and 5.7% last 3-year average.
- Cash Generation: Nearly 4.4% free cash flow margin and 4.3% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for DG was 2.2%.
- Valuation: DG stock trades at a PE multiple of 21.1
| DG | S&P Median | |
|---|---|---|
| Sector | Consumer Staples | – |
| Industry | Consumer Staples Merchandise Retail | – |
| PE Ratio | 21.1 | 23.5 |
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| LTM* Revenue Growth | 5.0% | 6.1% |
| 3Y Average Annual Revenue Growth | 5.7% | 5.4% |
| Min Annual Revenue Growth Last 3Y | 2.2% | 0.2% |
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| LTM* Operating Margin | 4.3% | 18.8% |
| 3Y Average Operating Margin | 5.9% | 18.2% |
| LTM* Free Cash Flow Margin | 4.4% | 13.5% |
*LTM: Last Twelve Months | For more details on DG fundamentals, read Buy or Sell DG Stock.
And What If The Support Breaks?
Dollar General isn’t immune to big pullbacks. It fell about 18% in both the 2018 correction and the Covid crash. The recent inflation shock hit even harder, dragging the stock down over 60%. The company has solid fundamentals, but these dips show the risk is real. No matter the strength, market stress can still lead to steep losses.
But the risk is not limited to major market crashes. Stocks fall even when markets are in good shape – think events like earnings, business updates, outlook changes. Read DG Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
Still not sure about DG stock? Consider the portfolio approach.
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