Is Dollar General Corp. overvalued or undervalued?

As of 30 June 2025, Dollar General Corp. has moved from an expensive to a very expensive valuation grade. The company is currently overvalued, as indicated by its P/E ratio of 22, which is higher than the peer average of 20.09 for Dollar Tree, Inc. and significantly higher than the EV to EBITDA ratio of 11.46. Additionally, the Price to Book Value stands at 3.24, suggesting a premium over its book value compared to its peers.
In terms of peer comparison, Dollar Tree, Inc. has a P/E of 18.49, while Burlington Stores, Inc. is at 39.78, highlighting the relative overvaluation of Dollar General. Furthermore, the company's recent stock performance shows a year-to-date return of 40.99%, significantly outpacing the S&P 500's return of 12.22%, but its long-term performance has been poor, with a 3-year return of -56.15% compared to the S&P 500's 70.41%.