Like for so much of the market, it’s been a volatile couple of months for Dollar General Corp. (NYSE:DG) stock. Dollar General stock dropped 20% between late January and early March as the market turned south. But solid earnings last month moved DG stock higher, and the rally has continued over the past few weeks.

I think that rally still has some legs. I pounded the table for DG after earnings, and even with the price about 5% higher, the stock continues to look attractive.

A Wall Street analyst raised a competitive concern this week, which is worth keeping in mind. But even with some level of appropriate caution, the rewards here clearly outweigh the risks.

The Street Weighs in on Dollar General Stock

Two different analyst notes came out on DG stock this week. On Monday, Raymond James expressed caution toward the discounter group. The firm downgraded not only Dollar General stock, but rivals Dollar Tree, Inc. (NASDAQ:DLTR) and Big Lots, Inc. (NYSE:BIG).

The driver behind the change was pricing at Walmart Inc (NYSE:WMT). While Dollar General has invested some of its tax-reform savings in its workforce, Walmart instead has doubled down on its already-aggressive pricing. That could put Dollar General in a tough spot: either lower prices, which hurts margins, or potentially seeing some traffic head to its larger rival.

It’s a fair concern. When both DG and DLTR stumbled in 2016, Walmart was the culprit. With Dollar General itself guiding for “mid-two percent” comps this year, even modest share losses could lead to opex deleverage and pressure earnings.

Of course, the dollar stores have had some success competing against Walmart, one reason WMT stock has largely stalled out as it’s become a mature, same-store sales story. And another analyst sees Dollar General stock a bit differently.

JPMorgan Chase & Co. (NYSE:JPM) analyst Matthew Boss upgraded DG to “Overweight” on Tuesday, with a price target of $116. And Boss’s case for Dollar General stock echoes the one I laid out last month. Dollar General has room to improve margins, thanks to sourcing efforts and private-label sales. Dollar General’s customers are benefiting themselves for tax reform.

Most notably, Dollar General has an enormous white-space opportunity. DG, per Boss, could develop as many as 13,000 new stores. As the analyst pointed out, that suggests eight to nine years’ worth of 6%+ square footage growth.

Add to that 2-4% comp growth, and there’s a path for Dollar General stock, with any sort of margin expansion, to grow double-digit earnings annually for the next decade. That growth simply isn’t priced in to Dollar General stock right now.

DG Stock Remains a Long-Term Buy

It’s worth pointing out that even Raymond James, in downgrading DG stock, kept an “Outperform” rating and a $105 price target. Indeed, the average Street analyst sees ~8% upside, to roughly $108.

I think that’s too conservative. At its current price around $100, DG stock trades at just 15x FY19 consensus EPS estimates. Assuming double-digit EPS growth for the next decade, that multiple is far too low.

Assuming DG can fend off Walmart, and that it continues to thrive amid increasing competition from Amazon.com, Inc. (NASDAQ:AMZN) and other online retailers, there’s a case for an 18-20x multiple more befitting its growth profile. That in turn suggests a path toward $125-$130.

If Walmart does take share, that fair value likely comes down. But at $100, it’s not as if investors are pricing in the best-case scenario here. And competition, aside, as I argued just this week, there’s downside protection as well. Dollar General should stay strong in a recession; indeed, same-store sales grew sharply during the financial crisis.

There simply aren’t a lot of “set it and forget it” type of stocks left in the market. But Dollar General stock is on that list. As long as it can fend off Walmart — as it’s done for most of its history — there’s a lot of growth ahead. And at 15x earnings, DG stock simply isn’t pricing in that growth yet.

As of this writing, Vince Martin has no positions in any securities mentioned.