Sportsman's Warehouse logged a 10.8% change during today's morning session, and is now trading at a price of $4.55 per share.
Sportsman's Warehouse returned losses of -45.0% last year, with its stock price reaching a high of $10.62 and a low of $2.98. Over the same period, the stock underperformed the S&P 500 index by -67.0%. As of April 2023, the company's 50-day average price was $5.01. Sportsman's Warehouse Holdings, Inc., together with its subsidiaries, operates as an outdoor sporting goods retailer in the United States. Based in West Jordan, UT, the small-cap Consumer Discretionary company has 3,000 full time employees. Sportsman's Warehouse has not offered a dividend during the last year.
The Business Has Operating Margins Consistently Higher Than the 4.35% industry Average:
| 2017-03-24 | 2018-03-29 | 2019-03-29 | 2020-04-09 | 2021-04-02 | 2022-03-30 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $780 | $810 | $849 | $886 | $1,452 | $1,506 |
| Gross Margins | 34.0% | 34.0% | 34.0% | 33.0% | 33.0% | 33.0% |
| Operating Margins | 8% | 6% | 5% | 4% | 8% | 6% |
| Net Margins | 4.0% | 2.0% | 3.0% | 2.0% | 6.0% | 7.0% |
| Net Income (MM) | $30 | $18 | $24 | $20 | $91 | $108 |
| Net Interest Expense (MM) | -$13 | -$14 | -$13 | -$8 | -$4 | -$1 |
| Depreciation & Amort. (MM) | -$14 | -$18 | -$18 | -$19 | -$22 | -$26 |
| Earnings Per Share | $0.7 | $0.42 | $0.55 | $0.46 | $2.05 | $2.44 |
| EPS Growth | n/a | -40.0% | 30.95% | -16.36% | 345.65% | 19.02% |
| Diluted Shares (MM) | 42 | 43 | 43 | 44 | 45 | 44 |
| Free Cash Flow (MM) | $55 | $72 | $50 | $108 | $259 | $32 |
| Capital Expenditures (MM) | -$39 | -$41 | -$18 | -$30 | -$20 | -$53 |
| Net Current Assets (MM) | -$60 | -$49 | -$17 | -$215 | n/a | -$59 |
| Long Term Debt (MM) | $134 | $132 | $28 | $24 | n/a | $66 |
Sportsman's Warehouse has strong margins with a stable trend, an excellent current ratio, and wider gross margins than its peer group. However, the firm has declining EPS growth. Finally, we note that Sportsman's Warehouse has weak revenue growth and a flat capital expenditure trend and irregular cash flows.
Trades Below Its Graham Number but Has an Elevated P/E Ratio:
Sportsman's Warehouse has a trailing twelve month P/E ratio of 41.8, compared to an average of 22.33 for the Consumer Discretionary sector. Based on its EPS guidance of $0.09, the company has a forward P/E ratio of 55.7. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is -25.5%. On this basis, the company's PEG ratio is -1.64, which indicates that its shares are overpriced. In contrast, the market is likely undervaluing Sportsman's Warehouse in terms of its equity because its P/B ratio is 0.62 while the sector average is 3.12. The company's shares are currently trading -76.9% below their Graham number. In conclusion, Sportsman's Warehouse's impressive cash flow trend, decent P/B ratio, and reasonable use of leverage demonstrate that the company may still be fairly valued — despite its elevated earnings multiple.
Sportsman's Warehouse Has an Analyst Consensus of Strong Upside Potential:
The 5 analysts following Sportsman's Warehouse have set target prices ranging from $5.0 to $15.0 per share, for an average of $7.4 with a buy rating. As of April 2023, the company is trading -32.3% away from its average target price, indicating that there is an analyst consensus of strong upside potential.
Sportsman's Warehouse has an above average percentage of its shares sold short because 13.0% of the company's shares are sold short. Institutions own 97.7% of the company's shares, and the insider ownership rate stands at 2.23%, suggesting a decent amount of insider shareholders. The largest shareholder is Cannell Capital LLC, whose 10% stake in the company is worth $16,805,088.
