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Dunelm (OTCPK:DNLMY) stock has been stuck in a rut. After almost doubling in value from its bottom in 2022, the shares have been trading on either side of 1,000p since. The stock hit
Why Dunelm's Cushioned Fall Could Be A Value Trap
Summary
- Despite Dunelm's impressive market share gains and a strong Q2 performance, the company faces significant headwinds from increased labour costs that could compress margin growth.
- While DNLMY's current valuation metrics appear attractive, its high FPEG ratio of 2.6 compared to the sector median's 1.7 suggests limited earnings growth potential, making it a potential value trap.
- The retailer's expansion plans present compelling growth opportunities. But with only a CAGR of 4.6% through FY27, these developments may already fully reflect the stock's current valuation.
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