Dollarama’s Stock Price: A Cautionary Tale of Overvaluation

Dollarama, the Canadian retail chain, has been on a wild ride in the past year, with its stock price careening from dizzying highs to stomach-dropping lows. The company’s 52-week high of 196.46 CAD, reached on June 10, 2025, was a fleeting moment of triumph, but the reality is that the stock has been on a downward trajectory for most of the year. The 52-week low of 124.99 CAD, recorded on September 9, 2024, is a stark reminder of the company’s vulnerability to market fluctuations.

The numbers don’t lie: the stock closed at 192.31 CAD on the last available date, a far cry from its lofty highs. But what’s even more concerning is the technical analysis, which reveals a price-to-earnings ratio of 43.903 and a price-to-book ratio of 40.324. These numbers are a clear indication of overvaluation, a warning sign that investors would do well to heed.

• The price-to-earnings ratio is a key metric that compares a company’s stock price to its earnings per share. A ratio above 20 is generally considered high, and Dollarama’s ratio of 43.903 is a clear red flag.
• The price-to-book ratio is another important metric that compares a company’s stock price to its book value. A ratio above 3 is generally considered high, and Dollarama’s ratio of 40.324 is a clear indication of overvaluation.

The writing is on the wall: Dollarama’s stock price is a ticking time bomb, waiting to be triggered by the next market downturn. Investors would do well to exercise caution and take a closer look at the company’s fundamentals before making any investment decisions. The risks are real, and the consequences of overvaluation are severe.