Entering text into the input field will update the search result below

Academy Sports: Still Undervalued Headed Into Q3 Earnings

Mr. Long Game profile picture
Mr. Long Game


  • Academy Sports and Outdoors remains a deep value opportunity.
  • ASO has repeatedly beat on earnings and has very good free cash-flow relative to its market cap.
  • The e-commerce business and omnichannel strategy is still maturing with an opportunity for the company to improve profitability.
  • ASO has rewarded shareholders with a significant buyback program and dividend payments may not be far off.
  • Management is managing capital conservatively with a primary focus on the balance sheet and growing strategically.

Woman shopping in a sport store, checking out of prices

Enes Evren/E+ via Getty Images

Investment Thesis

Academy Sports and Outdoors (NASDAQ:ASO) is a relatively new public company, but has a long history dating back to its founding in 1938 as a family business in Texas. With retail locations in

This article was written by

Mr. Long Game profile picture
I am a full-time investor with a focus on long positions, dividend growth, and options income strategies.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (17)

bazooooka profile picture
yes cheaper now...5 p/e
Dondomingue profile picture

Share Price vs. Fair Value

Current Price
Fair Value

View Data
Below Fair Value: ASO ($40.04) is trading below our estimate of fair value ($117.41)

Significantly Below Fair Value: ASO is trading below fair value by more than 20%.

Price To Earnings Ratio

PE Ratio
Company 5.7x
Industry 8.4x
Market 16.8x
View Data
PE vs Industry: ASO is good value based on its PE Ratio (5.7x) compared to the US Specialty Retail industry average (8.4x).

PE vs Market: ASO is good value based on its PE Ratio (5.7x) compared to the US market (16.8x).

Price to Earnings Growth Ratio

PEG Ratio
Company 15.5x
View Data
PEG Ratio: ASO is poor value based on its PEG Ratio (15.5x)

Price to Book Ratio

PB Ratio
Company 2.6x
Industry 2.6x
Market 2.3x
View Data
PB vs Industry: ASO's PB Ratio (2.6x) is in line with the US Specialty Retail industry average.

Next Steps

Explore potentially undervalued companies in the Retail industry.
Future Growth

How is Academy Sports and Outdoors forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Analysis Checks 1/6
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts

Feb 01 2019
Revenue US$4.784b
Earnings US$21.442m
kickered profile picture
I bought more shares today. The stock is simply criminally undervalued.

Eventually the shares will pop off in a spectacular manner, short-sellers can't keep it down for long.

All of the banks have increases their price targets for the company, and ASO recently smashed it's earnings call, but the stock didn't move.
@kickered I think downward pressure post earnings is because they didn’t issue 2022 guidance
Dondomingue profile picture
@Tripmcnealy223 there’s still another quarter for fiscal yr. 2021. All retailers were down. It wasn’t specific to ASO
Cambridge STR profile picture
I'm buying more ASO shares this week. I like that their EV/S ratio is below DKS's ratio yet ASO is showing faster revenue growth.
Great article. Long ASO!
Very good article. I am with @benet1800 and have been in and out of the stock since $16. Been a crazy run. I finally have a 3/4 position on this recent pull down. I was a little upset it didn't come down to $39 but that is o.k. with me. Friday should be interesting. Good luck
@Mr. Long Game while I found the article very informative , even enough to buy a few shares. I'm wondering why you don't have any yourself.
Mr. Long Game profile picture
@JR Mendacium mainly because there is only so much money to go around and I like my current positions, but if I feel I have enough cash available I’ll probably start to establish a position. I think ASO has a long runway in front of it so I’m not too concerned about not getting in as early as possible.
I’m also looking to cover a mix of stocks so you will see more articles in the future on companies I don’t own, but feel strongly about.
Yes to all of this. I am cuirous as to your price target and anticipated CAGR
Mr. Long Game profile picture
@Tripmcnealy223 I don't have a firm price target, but if you just assume profitability stays the same with each store they plan on opening and no improvement in the e-commerce business, if the P/E ratio bumps up a point to say 7.75 that gets you to a market cap of $5.2 billion or ~$59/share.
Yuppp profile picture
Well done analysis of ASO. They seem to be the go-to sporting goods store in the Southeast, at least from my life bubble perspective. Academy gift cards are given freely at birthdays & holidays by all I know and are most appreciated. ASO is one of the few stocks that I actually hope to have my Puts assigned when I sell them.
Mr. Long Game profile picture
@Yuppp Excellent way to play the stock at this point. Hopefully you are capturing the right amount of premium to fit your risk profile and offset any gains by holding a larger long position. Thanks for the comment and best of luck.
This is one of those companies that has been undervalued since it went public and still is and May continue to be for years. I love the company and shop there often. Been in and out of the stock and just recently at 49. Thanks for the well written article. Good to see an accurate factual report on ASO.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.