Dollarama (DOL.TO)
Consumer · TSX · Canada
Fundamentals
Valuation and ratings
Dollarama trades at C$188.95, which is 27% above the C$137.98 our discounted cash flow model puts on the business. On that measure it screens as expensive, which is not the same as saying it will fall.
Our moat model scores it 71 out of 100, which is a wide moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 38.2 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Dollarama
Dollarama Inc. operates a chain of stores and provides related logistical and administrative support activities. Its stores offer general merchandise, consumables, and seasonal products. The company operates in Canada, Latin America, Colombia, Peru, Australia, and Mexico. It also sells its products through online store. The company was formerly known as Dollarama Capital Corporation and changed its name to Dollarama Inc. in September 2009. Dollarama Inc. was founded in 1992 and is headquartered in Mount Royal, Canada.
Common questions
Is Dollarama (DOL.TO) undervalued?
Against our discounted cash flow estimate of C$137.98, DOL.TO at C$188.95 is 27% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
What is DOL.TO's P/E ratio?
DOL.TO trades at 38.2 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.