Ollie’s Bargain Outlet Holdings, Inc. (OLLI): what the price requires
At today's price, Ollie’s Bargain Outlet Holdings, Inc. (OLLI) is priced for +1.6% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/OLLI
Headline
| Field | Value |
|---|---|
| Ticker | OLLI |
| Company | Ollie’s Bargain Outlet Holdings, Inc. |
| Current price | $65.34/sh |
| Composition | Consumables 32% / Home 28% / Seasonal 19% / Other 21% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 1.4% |
| Operating margin today | 10.2% |
| Margin compression implied | -8.8pp |
| Implied growth | 1.6% |
| Multiple paid | 16x operating income |
The operating-margin requirement is derived from the framework's value band at year 10, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 8% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.7pp.
Reconcile: at the x-ray's 9.3% required return this reads ~10%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.74σ |
| cohort percentile (of 69 peers) | 35 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.25x | 5 | expensive |
| Earnings | 2.24x | 5 | expensive |
| Relative | 0.72x | 5 | justifies |
| Growth | 0.70x | 3 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.4%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $133.09 | 0.49x | yes | FCF base $0.3B, growth 17% (input: historical growth), terminal g 4.0%, WACC 8.4%, 6yr projection |
| DCF Exit Multiple | Growth | $93.20 | 0.70x | yes | Exit EV/EBITDA: 10.2x / 12.2x / 14.2x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $90.33 | 0.72x | yes | P/E 22x (static sector reference · 2026-04), scenarios: 17.9x / 22.0x / 26.1x (bear / base = reference held flat / bull), EV/EBITDA 14x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $44.07 | 1.48x | yes | BV/sh $30.89, ROE (TTM) 13.2%, ke 9.3% |
| Two-Stage Excess Return | Asset | $52.18 | 1.25x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $64.96 | 1.01x | yes | Rev $2.7B, growth 17% (input: historical growth; tapered), Terminal P/S: 1.2x / 1.5x / 1.7x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $99.42 | 0.66x | yes | EPS $4.04, growth 25% (input: historical EPS growth), PEG=0.65 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $23.27 | 2.81x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.22B × (1−24%) / WACC 8.4% → EPV (no growth) |
| Residual Income | Asset | $53.91 | 1.21x | yes | BV $30.89 + 5yr PV of (ROE (TTM) 13.2% − Kₑ 9.3%) × BV; BV grows 8.6%/yr |
| Graham Number | Asset | $52.99 | 1.23x | yes | √(22.5 × EPS $4.04 × BVPS $30.89) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $75.93 | 0.86x | yes | EBITDA $0.37B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | $29.22 | 2.24x | yes | FCF $212.7M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $26.87 | 2.43x | yes | SBC-adj FCF $0.20B (FCF $0.21B − SBC $0.01B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $130.36 | 0.50x | yes | EPS $4.04 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $8.03 | 8.14x | yes | BV $30.89 × (ROIC 2.2% / WACC 8.4%) |
| P/Sales Sector | Relative | $89.27 | 0.73x | yes | Revenue $2.73B × sector P/S 2.0x |
| PEG Fair Value | Relative | $149.12 | 0.44x | yes | EPS $4.04 × (PEG 1.5 × growth 24.6% (input: historical EPS growth)) → PE 36.9x |
| Earnings Yield | Earnings | $43.68 | 1.50x | yes | EPS $4.04 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $195.3m |
| Net debt / NOPAT (after-tax) | -1.00x (net cash) |
| Net debt / operating income (pre-tax) | -0.76x (net cash) |
| Share count CAGR (buyback) | -0.7% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
At $76.88 the price sits inside the range the methods support, not above it. The implied-expectations read backs out about 8% annual operating-income growth from here, against a current operating margin near 11.4%. That is a demanding but not heroic bar for a retailer still adding stores at a double-digit clip.
The model families disagree in a readable way. Relative multiples and the growth-DCF land at or above the price; earnings-power methods say it is expensive, roughly two and a half times their central estimate. The valuation rests on continued store growth and steady comps, not on the current earnings base alone.
The balance sheet removes the downside tail. Ollie's carries about $198 million in liquid assets against roughly $2.4 million of debt, a near net-cash position, and the share count has been flat to slightly lower. There is no leverage risk in this story; the risk is paying a growth multiple if the growth slows.
Bull Case
Start with where the price sits against the methods, because that frames everything else. At $76.88 the implied-expectations base lands near $116, with a supported range from roughly $72 to $143. The price is not stretched above what the valuation methods justify; it sits in the lower half of the band. Relative multiples and the growth-DCF clear the price comfortably, and only the earnings-power family says expensive. For a company growing units in the mid-teens, that is the spread you want to see: the market is paying for the franchise, not chasing it.
The franchise itself is a sourcing engine. Ollie's builds on what it calls the foundation of its growth, "Good Stuff Cheap," an "ever changing product assortment of national branded products at drastically reduced prices" (FY2025 10-K, accession 0001140361-25-010442). That ever-changing mix is the point: a closeout buyer that can place opportunistic orders turns excess inventory across the consumer economy into a treasure-hunt store experience competitors cannot easily replicate. The loyalty layer reinforces it. Management points to growing "member loyalty and utilizing more sophisticated data-driven targeted marketing" through Ollie's Army, which crossed 17.5 million members, up 12.6% year over year (same 10-K; Q1 FY2026 release).
The recent quarter shows the model compounding. Q1 FY2026 net sales rose 14.2% to $658.9 million, diluted EPS climbed 19% to $0.92, and gross margin expanded 80 basis points to 41.9% on lower supply-chain costs and better merchandise margin. The company opened 27 stores to reach 672 across 35 states, raised full-year adjusted EPS guidance to about $4.50, and lifted its buyback target to $125 million, roughly half of free cash flow. Mid-teens unit growth, expanding margins, a clean balance sheet and a buyer's culture is a recipe for the steady compounding the price assumes.
Bear Case
The bear case names competitors before it names a multiple, because the model's vulnerability is competitive, not financial. Ollie's competes for the same value-seeking shopper as Walmart, the dollar chains and Amazon, and its 10-K warns that consolidation among rivals could result in "the provision of a wider variety of merchandise at competitive prices by these consolidated companies, which could have a material adverse effect" on the business (FY2025 10-K, accession 0001140361-25-010442). The closeout supply Ollie's depends on is not contracted; it is opportunistic. When the broader retail system runs lean on excess inventory, the buyer's edge narrows, and larger competitors with more sourcing leverage can absorb the same deals.
The customer base is also a single point of dependence. The filing states plainly that "we depend on our loyal customer base, particularly our members of Ollie's Army, for our consistent sales and sales growth" (same 10-K). Comparable-store sales rose only 1.7% in the latest quarter, driven by basket size rather than traffic, and full-year guidance assumes just 2% comps. Most of the growth is new stores, not deepening per-store demand. A maturing store base and slowing comps would expose how much of the multiple rests on the unit-growth runway continuing.
That is where the valuation tension lands. The earnings-power family values the company at roughly $22, against a price near $77 (June 27, 2026), because zero-growth normalized earnings cannot carry the multiple. The price requires about 8% annual operating-income growth to be justified, and that growth is almost entirely a function of opening 75 stores a year on schedule and keeping comps positive. If store productivity fades or supply tightens, the price would re-rate toward the earnings-power frame, which sits well below today's level.
Valuation
The methods bracket the price rather than reject it. The growth-DCF family lands above the price, with DCF perpetual growth near $125 and DCF exit multiple near $100. Relative multiples are roughly fair, with relative valuation near $90, EV/EBITDA relative near $76 and P/sales near $89. The asset family sits below, with excess-return methods in the $44 to $54 range. The earnings-power family is the clear outlier on the low side: earnings power value near $22 and FCF-yield reads in the high $20s, reflecting that on a no-growth basis the current earnings stream does not support the price.
Inverting the price puts a number on the bet. To justify $76.88 the model requires about 8% annual operating-income growth, against a current operating margin near 11.4%, with the implied margin assumption modest. That is consistent with a retailer growing units in the mid-teens while comps stay low single digit. The implied range, roughly $72 to $143 around a base near $116, carries an ok reliability flag, which is to say the methods agree enough to be useful but the answer still leans on the store-growth runway holding.
The balance sheet does not change the central estimate, but it removes the left tail. With about $198 million of liquid assets against roughly $2.4 million of debt and a flat-to-shrinking share count, Ollie's funds its expansion and its buyback from internally generated cash. The risk in the name is not solvency or leverage; it is the price-versus-growth tradeoff. Pay near the base and the methods support you; pay up toward the high end and you are underwriting flawless execution on the store plan.
Catalysts
Ollie's reported Q1 FY2026 with sales up 14.2% to $658.9 million, EPS of $0.92 up 19%, comps up 1.7%, and gross margin of 41.9%, and the stock rose on the print (StockTitan). Management raised full-year adjusted EPS guidance to about $4.50 and lifted the buyback target to $125 million (Simply Wall St).
The near-term catalysts are the store cadence and comps. Full-year 2026 guidance calls for 75 new store openings, about 2% comparable-store sales growth, gross margin near 40.7%, and operating income of $340 to $348 million (AlphaStreet). Watch three things into the next two quarters: whether the new-store pace stays on plan and the productivity of those stores holds, whether comps stay positive on traffic rather than just basket, and whether closeout supply stays abundant enough to protect the 40%-plus gross margin. Positive comps with on-schedule openings support the unit-growth thesis the price assumes; soft comps or a supply pinch would pull attention toward the earnings-power frame, which sits far below the current price.
Peer Cohorts (Per Segment, With Filing Citations)
Ollie's Bargain Outlet (consolidated) (reported)
- FIVE (Five Below, Inc.)
- (no filing in the citation store)
- BURL (BURLINGTON STORES, INC.)
- (no filing in the citation store)
- KSS (KOHL'S CORP)
- (no filing in the citation store)
- DDS (DILLARD’S, INC.)
- (no filing in the citation store)
- PSMT (PriceSmart, Inc.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.