Dollar General Stock Is Rallying. Is It Still a Bargain?

Core Viewpoint - Dollar General's stock has significantly outperformed the S&P 500 in 2025, rising over 50% amidst economic uncertainties, prompting a reassessment of its valuation [1][2][4]. Company Performance - Dollar General's stock price increase is a partial recovery from a previous decline, as it remains approximately 57% below its 2022 peak [6]. - The company has faced earnings pressure due to a shift towards lower-margin products and rising costs from inflation [7]. - Fiscal first-quarter results indicate positive trends, with same-store sales increasing by 2.4%, overall sales up by 5.3%, and gross margin improving by 78 basis points [8]. Market Position - Dollar General's business model benefits from economic uncertainty, as consumers tend to seek lower-priced options during tough times, allowing the company to reach underserved markets [3][4]. - The company's price-to-sales and price-to-book-value ratios are currently below their five-year averages, suggesting potential for further growth [8]. Future Outlook - The stock's rise is influenced by both the company's turnaround efforts and broader economic concerns, making it essential for investors to monitor ongoing business progress [11].