Academy Sports and Outdoors (ASO): Exploring Valuation as Stocks Rally on Trade Truce Hopes and Fed Rate Cut Expectations

Shares of Academy Sports and Outdoors (ASO) moved higher as optimism grew around a possible trade truce between the U.S. and China. Such a truce could help relieve tariff pressures and reduce overall economic uncertainty.

See our latest analysis for Academy Sports and Outdoors.

After a turbulent stretch, Academy Sports and Outdoors has seen renewed trading interest as hopes rise for lower tariffs and a more favorable economic environment. Even with recent short-term share price declines, including a 1-month return of -10.4%, the longer-term picture is still impressive. A 5-year total shareholder return of 176% shows that staying the course has rewarded patient investors, though momentum has cooled from its earlier pace.

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With shares now trading at a sizable discount to analysts’ targets despite strong long-term returns, the key question for investors is whether Academy Sports and Outdoors is truly undervalued or if future growth is already fully reflected in today’s price.

Most Popular Narrative: 18.5% Undervalued

Today’s narrative suggests Academy Sports and Outdoors could be trading well below what analysts believe it’s worth, even after recent volatility and slower momentum. Whether this discount is sustainable depends on some bold strategic bets and sector shifts that analysts say could shape the next five years.

An ongoing store expansion strategy focused on secondary and 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.

Read the complete narrative.

Want to see why the narrative puts so much weight on store growth and new markets? The model’s value is built on aggressive sales expansion, profit margin moves, and one earnings jump you might not expect. What makes these projections stand out? Only the full narrative reveals the dramatic assumptions behind this striking valuation.

Result: Fair Value of $57.50 (UNDERVALUED)

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

However, persistent cost pressures or a reliance on higher income customer spending could undermine the optimistic growth story outlined by analysts.

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

Build Your Own Academy Sports and Outdoors Narrative

If you think there’s more to the story, or feel compelled to dig into the numbers yourself, you can craft your own perspective in just minutes. Do it your way

A good starting point is our analysis highlighting 4 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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