Last Update 20 Feb 26

Fair value Decreased 0.37%

ASO: Future Store Openings And P/E Expectations Will Shape Balanced Outlook

Narrative Update: Analyst Price Target Change for Academy Sports and Outdoors

The updated analyst price target for Academy Sports and Outdoors reflects a modest adjustment of roughly $0.20. Analysts point to recent target increases from firms like Morgan Stanley and Truist as support for their refined assumptions around fair value, discount rate, revenue growth, profit margin, and future P/E.

Analyst Commentary

Recent research updates on Academy Sports and Outdoors center on refreshed price targets and updated estimates around what analysts see as fair value, risk, and execution in the current operating backdrop.

Bullish Takeaways

Bullish analysts raising price targets by low single dollar amounts indicate they see room for the shares to better reflect their updated assumptions on revenue and profit margins.
The revised targets suggest confidence that current earnings power, together with the assumed future P/E, can support a higher fair value than previously modeled.
Some of the optimism is tied to execution, with bullish analysts signaling that the company’s operating model and cost structure may support the earnings profile they are incorporating into their valuation work.
Incremental target moves of a few dollars point to analysts fine tuning their outlooks rather than making wholesale changes, which can be reassuring if you prefer step by step revisions to fair value estimates.

Bearish Takeaways

Even with higher targets, cautious analysts are still embedding a discount rate that reflects execution risk and uncertainty around how consistently current revenue and margin assumptions might hold.
There is an implicit ceiling in the updated targets, which indicates that analysts see limits on how far the valuation can stretch relative to their assumed future P/E and earnings path.
Some caution centers on the sensitivity of the fair value to small changes in key inputs, such as profit margin or sales growth, which can move the target price by a few dollars in either direction.
By only adjusting targets by a modest amount, bearish analysts are signaling that, while they accept the updated inputs, they are not yet prepared to assign a meaningfully higher valuation multiple to the stock.

What's in the News

Updated buyback activity shows that from August 3, 2025 to November 1, 2025, Academy Sports and Outdoors repurchased 0 shares for $0 million, while completing a total of 3,239,976 shares repurchased for $163.56 million under the program announced on December 4, 2024 (Key Developments).
The company revised its earnings guidance for the fiscal year ending January 31, 2026, now expecting net sales of $6.025b to $6.200b, GAAP net income of $365 million to $400 million, and diluted GAAP EPS of $5.35 to $5.85, compared with prior ranges that were slightly wider on both sales and earnings (Key Developments).
Academy Sports and Outdoors reported opening eleven new stores in the third quarter of 2025, bringing the footprint to 317 locations across 21 states, with 24 new stores opened in fiscal 2025 and plans for an additional 20 to 25 new stores in fiscal 2026 (Key Developments).

Valuation Changes

Fair Value: The model fair value estimate moved slightly from $60.17 to $59.94, a very small adjustment of about 0.4%.
Discount Rate: The discount rate eased slightly from 9.56% to 9.51%, indicating a small change in the assumed risk profile used in the analysis.
Revenue Growth: The revenue growth assumption is effectively unchanged at about 5.68%, with only a very small numerical adjustment in the updated model.
Net Profit Margin: The net profit margin input remains effectively stable at about 6.32%, reflecting only a minor rounding level change.
Future P/E: The assumed future P/E multiple edged down modestly from 11.47x to 11.41x, pointing to a slightly lower valuation multiple in the updated assumptions.

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Key Takeaways

Rapid e-commerce growth and store expansion into underserved markets are enhancing market share, revenue prospects, and operating leverage.
Focused investments in private label, loyalty programs, and supply chain efficiencies are supporting margin stability, customer growth, and improved earnings.
Reliance on higher-income customers, cost pressures, intensified promotions, vendor dependencies, and regional concentration all pose significant risks to revenue growth and profitability.

Catalysts

About Academy Sports and Outdoors

Through its subsidiaries, operates as a sporting goods and outdoor recreational retailer in the United States.What are the underlying business or industry changes driving this perspective?

Strong acceleration in e-commerce (18% growth in Q2 and expanding digital assortment/omnichannel capabilities) positions Academy to capture greater share as consumer spending shifts online, likely supporting outperformance in future revenues and market share.
An ongoing store expansion strategy focused on secondary/tertiary markets with growing populations and suburban migration (20-25 new stores in 2025, robust early comps in new stores) sets up above-peer top-line growth and improved operating leverage as these locations mature.
Investments in private label (strong value proposition, strategic price points, differentiated products) and ongoing negotiations with vendors to offset tariffs are expected to support gross margin stability and even expansion, positively impacting net margins and EPS.
Targeted customer loyalty and marketing programs (over 12 million rewards members, focus on higher-income cohorts trading into Academy) are driving higher spending per customer and improved traffic from desirable demographics, supporting more resilient comp sales and margin profile.
Implementation of supply chain and technology initiatives (RFID rollout, handhelds for inventory/order fulfillment, improved DC operations) are already yielding better in-stock levels and inventory accuracy, with management targeting 100bps SG&A and supply chain savings, which should enhance future earnings and working capital efficiency.

Academy Sports and Outdoors Earnings and Revenue Growth

Academy Sports and Outdoors Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Academy Sports and Outdoors's revenue will grow by 6.6% annually over the next 3 years.
Analysts assume that profit margins will increase from 6.2% today to 6.4% in 3 years time.
Analysts expect earnings to reach $460.3 million (and earnings per share of $7.48) by about September 2028, up from $370.9 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 9.2x on those 2028 earnings, up from 8.8x today. This future PE is lower than the current PE for the US Specialty Retail industry at 18.7x.
Analysts expect the number of shares outstanding to decline by 5.24% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 9.65%, as per the Simply Wall St company report.

Academy Sports and Outdoors Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Academy's strong recent comps and growth are being driven mainly by higher-income customers ($100k+ households), while lower and middle-income cohorts continue to show flat or declining traffic and spending, posing a long-term risk to revenue growth if economic conditions worsen or if these segments don't rebound.
Persistent cost pressures from rising tariffs, labor inflation, and higher e-commerce fulfillment/shipping costs are eroding gross margins and compressing net earnings, and these headwinds may accelerate if wage or tariff environments deteriorate further.
The promotional environment is intensifying year-over-year, and Academy is seeing sharper customer aggregation around promotional events, suggesting erosion of pricing power and a risk to both gross margins and sustained market share gains.
Dependence on brand partnerships (Nike, Jordan, Adidas, etc.) exposes the company to risks from vendor direct-to-consumer shifts and loss of exclusivity or favored access, which could limit future product variety, reduce competitive differentiation, and put downward pressure on revenues.
Heavy regional market exposure (Southeast, South Central U.S.) and store expansion strategy make Academy vulnerable to natural disasters (as shown by recent floods), regional economic cycles, and demographic shifts away from traditional team sports, all of which could negatively impact long-term revenue and store productivity.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $57.5 for Academy Sports and Outdoors based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $70.0, and the most bearish reporting a price target of just $47.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $7.2 billion, earnings will come to $460.3 million, and it would be trading on a PE ratio of 9.2x, assuming you use a discount rate of 9.6%.
Given the current share price of $48.76, the analyst price target of $57.5 is 15.2% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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