DKS

Investor's Guide to DICK'S Sporting Goods

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.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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