Assessing Dillard's (DDS) Valuation Following Substantial Three-Month Share Price Gains

Dillard's (DDS) stock has continued to draw attention with its recent movement, catching the eye of investors curious about its steady performance. Over the past month, the stock is down slightly, but gains over the past 3 months have been substantial at 29%.

See our latest analysis for Dillard's.

After a strong jump over the past quarter, Dillard's continues to show momentum with a share price up 34.5% year-to-date and a remarkable 59.7% total shareholder return over the last year. While recent weeks saw only modest movement, this steady upward trend suggests optimism remains among investors about the company’s prospects both in the near and long term.

If seeing DDS’s performance has you curious about where else strong momentum and conviction exist, it’s a great time to discover fast growing stocks with high insider ownership

The question now is whether Dillard's current price reflects untapped value, or if the market has already factored in the company's future prospects, which could leave little room for upside. Is there still a buying opportunity here?

Price-to-Earnings of 16.4x: Is it justified?

With Dillard's recent close at $606.36, its price-to-earnings (P/E) ratio of 16.4x sits well below both the industry and peer group averages, hinting at relative value.

The P/E ratio measures how much investors are willing to pay for a dollar of earnings. For retailers like Dillard's, this multiple often reflects how the market views both stability and future growth potential.

On the surface, Dillard's multiple looks attractive against the Global Multiline Retail industry average of 19.9x and the peer average of 22x. This suggests the market either undervalues its current position or expects future challenges. However, compared to its estimated fair price-to-earnings ratio of 10.8x, Dillard's stock is trading at a significantly higher level. This is an area the market might eventually revisit if fundamentals do not improve.

Explore the SWS fair ratio for Dillard's

Result: Price-to-Earnings of 16.4x (UNDERVALUED compared to industry/peers, OVERVALUED compared to fair ratio)

However, recent declines in annual revenue and net income raise concerns. This could challenge the sustainability of Dillard's current valuation trend.

Find out about the key risks to this Dillard's narrative.

Another View: Our DCF Model Weighs In

Taking a different approach, the SWS DCF model suggests that Dillard's may be slightly overvalued, with the current share price at $606.36 sitting above our estimated fair value of $552.41. This perspective challenges the story told by relative value multiples and highlights the potential for downside if growth expectations falter. Which side should investors trust?

Story Continues

Look into how the SWS DCF model arrives at its fair value.DDS Discounted Cash Flow as at Nov 2025

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Dillard's for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 870 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Dillard's Narrative

If you have your own point of view or want to dig deeper into the numbers, you can craft your personal take on Dillard's in just a few minutes, Do it your way

A great starting point for your Dillard's research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include DDS.

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