Academy Sports and Outdoors (ASO) is a strong player in the sporting goods and outdoor recreation market, but it's flying under the radar heading into the holiday season. The company has a solid track record of profitability, strong revenue growth, and a valuation that looks too low to ignore.
# Financial Highlights
* **12 mo Revenue**: $6.11B
* **Net Income**: $487.2M
* **12 mo EPS**: $6.45 pretty solid for a retailer in this space
* **Valuation**: P/E ratio is 7.44. For comparison, Dick’s Sporting Goods is 14.97 and they sell the same stuff
* **FCF**: $218M up from $167M last quarter
# Why ASO Stands Out
1. Academy opened 16 new stores in 2024 with 1/3 of those in Q4 alone. Goal by 2027 is to open between 160-180 new stores.
2. Partnering with DoorDash for same day delivery so you can get your Wendy's frosty and a new baseball glove in the same order.
3. Academy is known more for its winter and spring sports. Think hunting, fishing, baseball, basketball and those seasons are here and around the corner. And yes they carry all the same items that Dick's does often for more of a deal (Yeti, Nike, Carhartt, Shimano, Brooks, Rawlings, UnderAmour, etc).
4. ASO consistently generates strong earnings, but the market hasn’t caught up yet imo. The P/E ratio is significantly lower than the industry average, making it a potential value play.
5. The **12/10 earnings report** could provide the boost this stock needs, especially if they beat expectations or provide strong holiday guidance. Plus, the holiday season itself is a crucial time for ASO, and strong Q4 sales could drive further upside.
6. Analysts are on board with an average price target of $63.40. That’s about a 30% upside from where it’s trading now, suggesting there’s room to grow with upper end being $85.
7. Currently trading below its 50-day and 200-day moving averages, maybe signaling some hesitation in the market but if it breaks through those levels after earnings, it might attract more buyers.
8. At 62.99 RSI, it’s not quite overbought but heading in that direction - another sign that buyers are starting to show some interest.
**TLDR**
Academy Sports is a profitable, undervalued company with a big quarter ahead into the holiday/ spring sports season.
**Position (im poor for now)**: 20 1/17 $70c