Assessing ANTA Sports After Q1 Revenue Surge Amid Mainland China Demand Recovery

If you are weighing your next move with ANTA Sports Products, you are not alone. Should you ride the momentum or sit back until the picture becomes clearer? Lately, this stock has sparked plenty of conversations, and for good reason. ANTA’s price has seen various swings in recent months. The last close landed at 93.2, and while the past week showed a dip of -1.4%, the 30-day return edged up by 0.8%. Looking further back, the story brightens. The year-to-date gain stands at 22.4%, with a robust 36.6% jump over the last twelve months. Even over a three-year window, investors have seen a 9.7% gain and an impressive 27.4% return over five years.

This growth does not exist in a vacuum. Recent activity in the sportswear and consumer goods markets has contributed to shifting investor sentiment, adding both fresh optimism and a few nerves around valuation. Is ANTA Sports Products truly undervalued, or is the current price already factoring in all the good news?

To help clarify where things stand, let’s look at valuation. Using six key checks, the company earns a value score of 4, meaning it looks undervalued by four out of six measures. That alone will catch the eye of value-focused investors.

Next, I will walk through the main approaches to valuation that analysts use. Stay with me; at the end of the article, I’m revealing a perspective on valuation you will not want to miss.

ANTA Sports Products delivered 36.6% returns over the last year. See how this stacks up to the rest of the Luxury industry.

Approach 1: ANTA Sports Products Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a classic approach for valuing companies by estimating future cash flows and discounting them back to their present value. In essence, it extrapolates what the company could generate in cash over the coming years and calculates what that stream is worth today.

For ANTA Sports Products, the latest twelve months' Free Cash Flow stands at approximately CN¥16.97 billion. Analyst projections see this rising to over CN¥21.72 billion by 2027, with further extrapolation by Simply Wall St suggesting Free Cash Flow could approach CN¥28.08 billion by 2035. This forecasted growth underlines the company's ability to continue generating robust cash returns well into the next decade.

Using the 2 Stage Free Cash Flow to Equity model, these flows are discounted back to present value, resulting in an estimated intrinsic value per share of HK$134. Comparing this number to the current share price of HK$93.20, the model implies the stock is trading at a 30.4% discount. In other words, it looks undervalued at today’s price.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for ANTA Sports Products.

Our Discounted Cash Flow (DCF) analysis suggests ANTA Sports Products is undervalued by 30.4%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: ANTA Sports Products Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely used tool for valuing established, profitable companies like ANTA Sports Products. Because PE represents how much investors are willing to pay for each dollar of earnings, it is especially relevant for businesses with steady profits and clear growth prospects.

In general, a higher PE ratio can indicate that investors expect robust future growth, while a lower PE ratio may suggest slower growth or higher risk. However, the right or “fair” PE for a stock depends on factors such as how rapidly the company is expected to grow, its profit margins, and its risk profile relative to competitors.

ANTA Sports Products currently trades at a PE ratio of 16.1x. This places it below the peer group average of 17.9x, but well above the luxury industry average of 10.1x. To provide further clarity, Simply Wall St uses a metric called the “Fair Ratio,” which predicts what a reasonable PE for this particular company should be, considering its specific growth, profitability, market cap, and risks. Although comparing PE to sector averages is useful, the Fair Ratio is more insightful because it tailors the benchmark to ANTA’s unique situation.

Simply Wall St calculates a Fair Ratio for ANTA Sports Products of 13.0x. Since the current PE is higher than this, the shares appear somewhat overvalued on earnings compared to where they should trade based on fundamentals and risk profile.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your ANTA Sports Products Narrative

Earlier, we mentioned there is an even more powerful way to understand valuation, so let us introduce you to Narratives. Instead of just relying on formulas or analyst targets, Narratives allow you to define your own story about ANTA Sports Products by laying out your expectations for its future revenue, profit margins, and fair value, and connecting these directly to a financial forecast.

Think of a Narrative as your personal perspective, blending company news, competitive positioning, and trends with key financial estimates, so you can clearly see why you believe the stock is worth more (or less) than its market price. On Simply Wall St’s Community page, millions of investors can easily create, view, and compare Narratives. This makes the approach accessible to everyone, whether you are new to investing or a seasoned pro.

Narratives dynamically update as news or earnings are released, so your investment case always reflects the latest facts. For example, one ANTA investor might be bullish, projecting a fair value as high as HK$142.75 if global expansion and innovation pay off, while another may be more cautious and estimate just HK$95.35 based on risks and cost pressures. By comparing these viewpoints to the current price, Narratives help you judge when to buy, sell, or simply dig deeper into your assumptions.

Do you think there's more to the story for ANTA Sports Products? Create your own Narrative to let the Community know!

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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