The winds of change are blowing through Academy Sports Outdoors, and investors are taking notice. This specialty retail giant has recently made impressive strides, sparking curiosity about its future trajectory. With a market capitalization of $3.4 billion and a solid operating margin of 0.12%, Academy Sports is positioned as a significant player in the domestic retail space. Its robust cash flow from operations, standing at $535.78 million, underscores its financial health and operational efficiency.
Investors are particularly intrigued by its low price-to-earnings ratio of 7.67X, which suggests the stock might be undervalued compared to its earnings potential. The company's substantial institutional ownership, at 96.89%, further reinforces confidence in its market position and future prospects. As Academy Sports continues to navigate the retail landscape, the question remains: could these strong fundamentals herald a new surge for investors? Some baby boomers are concerned about the specialty retail sector, but let's take a closer look at Academy Sports and Williams Sonoma as possible short-term investment opportunities. We'll examine the competitive strengths of both companies.
Investment perspective, in general, refers to a viewpoint or opinion regarding investment opportunity in Academy Sports. It encompasses the assessment of an investment's potential risks and rewards, and expectations for its
performance over time. Several factors influence the investment perspective on Academy Sports, including investment goals, risk tolerance, time horizon, market conditions, and research and analysis. Investors have varying goals, such as capital preservation, income generation, or long-term growth. Risk tolerance plays a significant role in shaping an investor's perspective, with some being more risk-averse and others willing to take on higher risks for potential returns.
How important is Academy Sports's Liquidity
Academy Sports
financial leverage refers to using borrowed capital as a funding source to finance Academy Sports Outdoors ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Academy Sports financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Academy Sports' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Academy Sports' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Academy Sports's total debt and its cash.
Academy Sports Gross Profit
Academy Sports Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Academy Sports previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Academy Sports Gross Profit growth over the last 10 years. Please check Academy Sports'
gross profit and other
fundamental indicators for more details.
Another Deeper Perspective
Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include products or services discounts, promotions, as well as early payments on invoices or services rendered in advance.
Revenue Breakdown
Now, let's check Academy Sports revenue. Based on the latest financial disclosure, Academy Sports Outdoors reported 6.16
B of revenue.
This is 13.61% lower than that of the Specialty Retail sector and 56.44% lower than that of the
Consumer Discretionary industry. The revenue for all United States stocks is 34.72% higher than that of Academy Sports. As for Williams Sonoma we see revenue of 7.75
B, which is 45.18% lower than that of the Consumer Discretionary
| Academy | 6.16 Billion |
| Sector | 7.13 Billion |
| Williams | 7.75 Billion |
Buy low, sell high is a mantra that resonates with investors eyeing Academy Sports Outdoors, especially as the stock shows promising momentum. With a current ratio of 1.58X, the company demonstrates a solid ability to cover its short-term liabilities, which is reassuring for potential investors. Despite a slight dip in quarterly revenue growth at -2%, the stock's price-to-earnings ratio of 7.67X suggests it might be undervalued compared to its peers in the specialty retail sector. As the stock hovers near its 52-week low of 44.73, the potential upside to the target price of 62.44 could present a lucrative opportunity for those willing to take the plunge..
Academy showing symptom of lower volatility
Academy Sports + Outdoors is showing reduced volatility, as seen in its Jensen Alpha, which has fallen to -0.25. This figure, which assesses a stock's risk-adjusted performance against a benchmark, indicates that the stock might not be offering returns that match its risk. A negative Jensen Alpha could be a warning sign, suggesting possible price drops. While low volatility might attract cautious investors, the negative alpha implies underperformance, urging careful consideration before investing. The stock's volatility is further characterized by a skewness of 0.82 and kurtosis of 0.64.
These metrics help investors gauge market trends and manage risk during both market upswings and downturns, as increased volatility in bear markets can negatively affect stock prices, prompting portfolio adjustments.Academy Sports' recent upward movement has certainly caught the attention of investors, but the question remains whether this momentum will translate into a significant surge. With an analyst overall consensus rating of "Buy" and a highest estimated target price of $75.97, there is optimism surrounding the stock's potential. However, it's important to weigh this against the possible downside price of $45.85. While the valuation real value stands at 53.9, suggesting some room for growth, investors should remain cautious and consider these factors before making any decisions. Balancing the potential rewards with the inherent risks is key to navigating this investment opportunity effectively..
Building efficient market-beating portfolios requires time, education, and a lot of computing power!
The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.
Try AI Portfolio ArchitectEditorial Staff
Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Academy Sports Outdoors. Please refer to our
Terms of Use for any information regarding our disclosure principles.
Would you like to provide feedback on the content of this article?
You can get in touch with us directly or send us a quick note via email to
[email protected]