TGM's two-stage DCF values Dollar Tree, Inc. (DLTR) between $71.70 and $138.00 depending on assumptions, with a base case of $94.14. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth (floored at 2%)), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$120.45 is justified only if free cash flow grows about +7.3% a year (fading to 2.5% long-run) at a 7.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 0.5%/yr | 8.5% | $71.70 |
| Base case | 2.0%/yr | 7.5% | $94.14 |
| Optimistic | 5.0%/yr | 6.5% | $138.00 |
Current Price
$120.45
Market-Implied Growth
+7.3%/yr
vs +1.8% 5Y actual
Model Scenario Range
$71.70 – $138.00
model output — not a price target
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for DLTR (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $987.2M · 0.19B shares · net debt $1.7B
Estimated Fair Value
$94.14
-21.8% vs $120.45
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 2.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $120.45; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $124 | $141 | $163 | $193 | $239 |
| 6.5% | $97.66 | $108 | $120 | $136 | $157 |
| 7.5% | $79.85 | $86.35 | $94.14 | $104 | $116 |
| 8.5% | $67.13 | $71.69 | $77.00 | $83.27 | $90.78 |
| 9.5% | $57.60 | $60.94 | $64.76 | $69.16 | $74.28 |
