As of October 22, 2025, Dollarama Inc's estimated intrinsic value ranges from $65.83 to $323.68 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $323.68 | +76.9% |
| Discounted Cash Flow (5Y) | $238.01 | +30.1% |
| Dividend Discount Model (Multi-Stage) | $193.32 | +5.6% |
| Dividend Discount Model (Stable) | $208.19 | +13.8% |
| Earnings Power Value | $65.83 | -64.0% |
Is Dollarama Inc (DOL.TO) undervalued or overvalued?
With the current market price at $183.00, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Dollarama Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.49 | 0.56 |
| Cost of equity | 5.7% | 7.5% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 25.4% | 25.6% |
| Debt/Equity ratio | 0.1 | 0.1 |
| After-tax WACC | 5.4% | 7.2% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $238 | $70,654M | 89.0% |
| 10-Year Growth | $324 | $94,331M | 80.2% |
| 5-Year EBITDA | $93 | $25,622M | 69.7% |
| 10-Year EBITDA | $145 | $40,032M | 53.3% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $1,425M |
| Discount Rate (WACC) | 7.2% - 5.4% |
| Enterprise Value | $19,867M - $26,260M |
| Net Debt | $4,870M |
| Equity Value | $14,997M - $21,390M |
| Outstanding Shares | 276M |
| Fair Value | $54 - $77 |
| Selected Fair Value | $65.83 |
| Metric | Value |
|---|---|
| Market Capitalization | $50579M |
| Enterprise Value | $50579M |
| Trailing P/E | 0.00 |
| Forward P/E | 36.06 |
| Trailing EV/EBITDA | 6.90 |
| Current Dividend Yield | 21.51% |
| Dividend Growth Rate (5Y) | 15.08% |
| Debt-to-Equity Ratio | 0.10 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $97.10 |
| Discounted Cash Flow (5Y) | 25% | $59.50 |
| Dividend Discount Model (Multi-Stage) | 20% | $38.66 |
| Dividend Discount Model (Stable) | 15% | $31.23 |
| Earnings Power Value | 10% | $6.58 |
| Weighted Average | 100% | $233.08 |
Based on our comprehensive valuation analysis, Dollarama Inc's intrinsic value is $233.08, which is approximately 27.4% above the current market price of $183.00.
Key investment considerations:
Given these factors, we believe Dollarama Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.