As of June 17, 2025, Dollarama Inc has a Discounted Cash Flow (DCF) derived fair value of $225.00 per share. With the current market price at $193.74, this represents a potential upside of 16.1%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $179.91 |
| DCF Fair Value (10-year) | $225.00 |
| Potential Upside (5-year) | -7.1% |
| Potential Upside (10-year) | 16.1% |
| Discount Rate (WACC) | 5.9% - 7.8% |
Revenue is projected to grow from $6413 million in 02-2025 to $12023 million by 02-2035, representing a compound annual growth rate of approximately 6.5%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 02-2025 | 6413 | 9% |
| 02-2026 | 6726 | 5% |
| 02-2027 | 7165 | 7% |
| 02-2028 | 7829 | 9% |
| 02-2029 | 8524 | 9% |
| 02-2030 | 9071 | 6% |
| 02-2031 | 9644 | 6% |
| 02-2032 | 10329 | 7% |
| 02-2033 | 10918 | 6% |
| 02-2034 | 11193 | 3% |
| 02-2035 | 12023 | 7% |
Net profit margin is expected to improve from 18% in 02-2025 to 29% by 02-2035, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 02-2025 | 1169 | 18% |
| 02-2026 | 1346 | 20% |
| 02-2027 | 1573 | 22% |
| 02-2028 | 1864 | 24% |
| 02-2029 | 2179 | 26% |
| 02-2030 | 2469 | 27% |
| 02-2031 | 2656 | 28% |
| 02-2032 | 2877 | 28% |
| 02-2033 | 3075 | 28% |
| 02-2034 | 3187 | 28% |
| 02-2035 | 3460 | 29% |
with a 5-year average of $202 million. Projected CapEx is expected to maintain at approximately 4% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 02-2026 | 221 |
| 02-2027 | 245 |
| 02-2028 | 275 |
| 02-2029 | 286 |
| 02-2030 | 308 |
| 02-2031 | 330 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 3 |
| Days Inventory | 107 |
| Days Payables | 13 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 2026 | 2058 | 460 | 263 | 110 | 1225 |
| 2027 | 2389 | 538 | 280 | (41) | 1612 |
| 2028 | 2812 | 637 | 306 | 38 | 1831 |
| 2029 | 3248 | 745 | 333 | 56 | 2114 |
| 2030 | 3663 | 845 | 355 | 1 | 2463 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 179.91 | -7.1% |
| 10-Year DCF (Growth) | 225.00 | 16.1% |
| 5-Year DCF (EBITDA) | 68.18 | -64.8% |
| 10-Year DCF (EBITDA) | 104.39 | -46.1% |
Is Dollarama Inc (DOL.TO) a buy or a sell? Dollarama Inc is definitely a buy. Based on our DCF analysis, Dollarama Inc (DOL.TO) appears to be moderately undervalued with upside potential of 16.1%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a buy at the current market price of $193.74.