Assessing Academy Sports and Outdoors (ASO) Valuation As Revenue And Cash Flow Pressures Persist

Event driven look at Academy Sports and Outdoors (ASO)

Recent commentary around Academy Sports and Outdoors (ASO) has zeroed in on three pressure points: multiyear revenue declines, weaker same store sales, and a thinner free cash flow margin tied to higher investment.

See our latest analysis for Academy Sports and Outdoors.

The recent commentary around softer revenue, same store sales, and free cash flow appears to be feeding into sentiment. A 90 day share price return of 29.09% and a 1 year total shareholder return of 8.81% sit alongside a 3 year total shareholder return loss of 2.95%, hinting that momentum has picked up more recently after a tougher stretch.

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With revenue slipping over several years, same store sales under pressure, and heavier investment weighing on free cash flow, yet a value score of 5 and an estimated 37% intrinsic discount, is this weakness a buying opportunity, or is the market already pricing in a rebound?

Most Popular Narrative: 4% Undervalued

Academy Sports and Outdoors last closed at $57.73 against a narrative fair value estimate of about $60.17, which frames the latest analyst work as slightly supportive of the current price.

Strong acceleration in e-commerce (18% growth in Q2 and expanding digital assortment/omnichannel capabilities) is described as positioning Academy to capture greater share as consumer spending shifts online, which the narrative suggests could support future revenues and market share.

Read the complete narrative.

Curious what sits behind that fair value gap? Revenue, earnings, margins, discount rate, and a higher future P/E all pull weight in this story. The mix might surprise you.

Result: Fair Value of $60.17 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that gap relies on higher income customers staying engaged and on brand partners maintaining access and support, both of which could challenge the current narrative.

Find out about the key risks to this Academy Sports and Outdoors narrative.

Build Your Own Academy Sports and Outdoors Narrative

If parts of this story do not quite fit your view, or you prefer to build on the raw numbers yourself, you can shape your own version in just a few minutes and see how your assumptions stack up beside the consensus, all by choosing to Do it your way.

A great starting point for your Academy Sports and Outdoors research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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