A strong performer from today's afternoon trading session is DICK'S Sporting Goods, whose shares rose 5.5% to $221.65 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
a Very Low P/E Ratio but Its Shares Are Expensive:
DICK'S Sporting Goods, Inc., together with its subsidiaries, operates as an omni-channel sporting goods retailer primarily in the United States. The company belongs to the Consumer Discretionary sector, which has an average price to earnings (P/E) ratio of 22.06 and an average price to book (P/B) ratio of 3.18. In contrast, DICK'S Sporting Goods has a trailing 12 month P/E ratio of 18.3 and a P/B ratio of 6.65.
DICK'S Sporting Goods's PEG ratio is 2.32, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
Growing Revenues but Similar Gross Margins to the Industry Average of 32.35%:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $8,437 | $8,751 | $9,584 | $12,293 | $12,368 | $12,984 |
| Gross Margins | 28% | 28% | 32% | 38% | 35% | 35% |
| Net Margins | 4% | 3% | 6% | 12% | 8% | 8% |
| Net Income (M) | $320 | $297 | $530 | $1,520 | $1,043 | $1,047 |
| Net Interest Expense (M) | $10 | $17 | $49 | $58 | $95 | $58 |
| Depreciation & Amort. (M) | $244 | $270 | $326 | n/a | $365 | $394 |
| Diluted Shares (M) | 87 | 97 | 11 | 97 | 84 | 83 |
| Earnings Per Share | $3.24 | $3.34 | $5.72 | $13.87 | $10.78 | $12.18 |
| EPS Growth | n/a | 3.09% | 71.26% | 142.48% | -22.28% | 12.99% |
| Avg. Price | $29.0 | $32.81 | $39.7 | $93.49 | $95.81 | $221.65 |
| P/E Ratio | 8.87 | 9.65 | 6.31 | 5.12 | 7.13 | 17.43 |
| Free Cash Flow (M) | $515 | $187 | $1,329 | $1,309 | $558 | $940 |
| CAPEX (M) | $198 | $217 | $224 | $308 | $364 | $587 |
| Current Ratio | 1.38 | 1.4 | 1.52 | 1.81 | 1.65 | 1.71 |
DICK'S Sporting Goods has growing revenues and increasing reinvestment in the business and exceptional EPS growth. Additionally, the company's financial statements display generally positive cash flows and a decent current ratio of 1.71. Furthermore, DICK'S Sporting Goods has similar gross margins to its peers.
