Is Dollar Tree, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Dollar Tree, Inc. has moved from very expensive to expensive, indicating a shift in perception regarding its valuation. The company appears to be overvalued based on its current metrics, with a P/E ratio of 18, a price-to-book value of 5.05, and an EV to EBITDA ratio of 10.97. In comparison, Dollar General Corp. is rated very expensive with a P/E of 20.09, while Burlington Stores, Inc. is considered fair with a P/E of 39.78, highlighting that Dollar Tree's valuation is relatively lower among peers but still on the expensive side.
Despite its overvaluation, Dollar Tree has shown strong performance in the short term, with a one-week return of 10.08% compared to the S&P 500's 1.70%. However, over longer periods, such as three years, the company has underperformed significantly with a return of -29.69% against the S&P 500's 81.19%. This mixed performance further supports the view that Dollar Tree is currently overvalued.