A Look at Academy Sports and Outdoors’s Valuation Following New Whataburger Collaboration and Product Launch

If you are trying to make sense of Academy Sports and Outdoors (ASO) this week, there is plenty to talk about. The company just announced its third collaboration with Whataburger, rolling out a limited-time lineup featuring both brands' signature styles and tailgate essentials, from Hey Dude shoes to coolers and jerseys. With football season around the corner and two Texas favorites joining forces, investors are naturally wondering whether this is more than just a feel-good partnership, and if it marks a meaningful push for revenue growth as fall retail ramps up.

This move lands at an interesting moment for Academy Sports and Outdoors. The stock has been up roughly 33% over the past three months, despite being flat for the year and coming off a slower start in early 2025. In context with steady annual revenue and net income gains, recent signals suggest short-term optimism is outpacing the cautious longer-term trend. The company also has a new quarterly earnings release on the horizon, keeping sentiment fluid as investors weigh what comes next.

So with momentum picking up lately and the Whataburger partnership drawing attention, is the market overlooking value, or already pricing in a bigger earnings boost from these initiatives?

Most Popular Narrative: 3.9% Undervalued

According to community narrative, Academy Sports and Outdoors is seen as modestly undervalued, reflecting optimism for its future growth initiatives and improvements in profitability. The fair value estimate is slightly above current market levels when factoring in anticipated changes over the coming years.

The introduction of the Jordan brand and an expanded partnership with Nike in 2025 is expected to drive sales growth, particularly in apparel and footwear. This could bolster revenue and improve gross margins due to the higher margin nature of apparel sales. The plan to open 20 to 25 new stores in 2025 across new and existing markets is anticipated to expand Academy's market share and increase revenue, contributing positively to net sales growth.

Curious what’s fueling this valuation call? The narrative spotlights major brand partnerships and an ambitious retail expansion that could upend expectations. Want to see which surprising growth levers and margin assumptions are shaping this price target? Dive into the full report for further details on these projections and how they might influence views on Academy’s potential.

Result: Fair Value of $56.17 (UNDERVALUED)

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

However, recent declines in sales and mounting margin pressures raise real concerns about the sustainability of Academy’s projected growth and profitability path.

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

Another View: SWS DCF Model Perspective

While many focus on market comparisons to judge value, the SWS DCF model takes a different approach by evaluating future cash flows. It indicates undervaluation as well, but is the market overlooking another factor?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Academy Sports and Outdoors for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Academy Sports and Outdoors Narrative

If you have a different perspective or want to dig into the details yourself, you have the tools to shape your own view in just a few minutes. do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Academy Sports and Outdoors.

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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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