Academy Sports and Outdoors: A Value Play Ready To Regain Momentum

Summary

• Academy Sports and Outdoors is expanding aggressively, planning to open 160-180 new stores over five years, leveraging favorable demographics in high-growth markets.
• Despite 11 quarters of negative same-store sales, ASO has consistently generated positive free cash flow, highlighting operational efficiency. TTM FCF yield is 11%.
• For fiscal year 2025, I expect ASO to deliver same-store sales growth in the low-single digits. This coupled with new store openings should push the overall sales growth to mid-single digits.
• ASO's valuation is compelling, trading at a significant discount (7.7x 2026 P/E) compared to its closest peer, Dick’s Sporting Goods (15.7x).
• I rate ASO as a Buy with a target price of $85, driven by robust growth prospects, superior store economics, and a strong value proposition.

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Investment Summary

Academy Sports and Outdoors, Inc. (NASDAQ:ASO) is a leading retailer of sporting goods and outdoor recreation operating in the U.S. across 19 states with 298 stores. The market where ASO operates is very large (

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.