How the Foot Locker Acquisition Shapes DICK'S Sporting Goods' Value in 2025

If you have been watching DICK'S Sporting Goods recently and wondering whether to buy, sell, or simply hold steady, you are not alone. The stock is sitting at $229.93 after an impressive stretch, up 4.6% just in the past week, 3.9% over the last month, and stacking up a nearly 14.1% return across the last year. If you zoom out even further, the company has delivered a remarkable 340.1% gain over five years, rewarding long-term believers in the brand.

These numbers have turned some heads on Wall Street, especially given how retail stocks often ride the currents of shifting consumer confidence and macroeconomic news. Strong omnichannel initiatives and the expanding athletic market have fed into DICK'S Sporting Goods' growth narrative, though investors still keep an eye on the competitive landscape and evolving shopper habits.

With these price surges in mind, it is natural to ask if the stock has gotten ahead of itself or if it is still priced attractively. According to our valuation framework, DICK'S Sporting Goods scores a 5 out of 6, meaning it looks undervalued across most key checks. That might sound compelling, but what do those checks actually measure, and is there a smarter way to judge a stock’s real worth? In the next section, let us break down the traditional valuation tools and how DICK'S Sporting Goods stacks up, before exploring a more insightful approach that might change the way you invest.

DICK'S Sporting Goods delivered 14.1% returns over the last year. See how this stacks up to the rest of the Specialty Retail industry.

Approach 1: DICK'S Sporting Goods Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model works by estimating a company’s future cash flows and then discounting those figures back to their present value. This process helps investors determine what the business is truly worth today. This approach accounts for both near-term projections and longer-term growth, giving a holistic assessment of value.

For DICK'S Sporting Goods, the most recent Free Cash Flow stands at $689.8 Million. According to analyst estimates, this figure is projected to grow year over year, reaching $1.95 Billion by 2030. The first five years of cash flow forecasts rely on direct analyst estimates, while projections beyond that are extrapolated. This growing stream of cash provides a strong foundation for the company’s valuation.

The DCF analysis puts DICK'S Sporting Goods' fair value at $551.68 per share. With shares currently trading at $229.93, this means the stock is trading at a 58.3% discount to its intrinsic value. In summary, the model suggests DICK'S Sporting Goods is notably undervalued based on its anticipated cash flow generation, particularly for long-term investors seeking value.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for DICK'S Sporting Goods.

Our Discounted Cash Flow (DCF) analysis suggests DICK'S Sporting Goods is undervalued by 58.3%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: DICK'S Sporting Goods Price vs Earnings

For companies that are consistently profitable, the Price-to-Earnings (PE) ratio is often the most informative valuation multiple. It tells investors how much they are paying for each dollar of a company's earnings, making it quick to compare stocks within the same sector. Generally, higher growth expectations or lower business risks lead to higher "normal" or "fair" PE ratios. In contrast, riskier or slower-growing businesses tend to trade at lower multiples.

DICK'S Sporting Goods currently trades on a PE ratio of 15.7x. To provide context, the Specialty Retail industry average is 17.1x, and its public peers average an even loftier 45.5x. This makes DICK'S appear reasonably valued compared to direct competitors and the industry as a whole.

Further analysis using Simply Wall St's proprietary "Fair Ratio" model, which considers DICK'S earnings growth prospects, profit margins, business risks, and other company characteristics, calculates that a fair PE ratio would be 19.05x. This approach is more insightful than a basic industry or peer comparison, as it directly tailors expectations to DICK'S unique financial profile and market position, rather than assuming all companies should be measured by the same standard.

With the company trading at 15.7x, just below its calculated fair ratio of 19.05x, there is further evidence the stock is undervalued on an earnings basis. This reinforces the results from the discounted cash flow analysis.

Result: UNDERVALUED

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 DICK'S Sporting Goods Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is your personal investment thesis, where you connect a company's story—its strategy, competitive advantages, and risks—with your own forecasts for future revenue, earnings, and margins, ultimately arriving at what you believe is a fair value for the stock. Narratives take the guesswork out of investing by making it easy to translate your outlook into actual numbers and see if your point of view lines up with the current market price. On Simply Wall St’s Community page, used by millions of investors, Narratives are an accessible tool that helps you decide when to buy or sell by comparing fair value to share price, and they update automatically as new news or financial results come in. For example, some investors see DICK'S Sporting Goods thriving after its Foot Locker acquisition and forecast a fair value as high as $280, while others focus on integration risks and set a fair value as low as $165. This showcases how Narratives let you express your own conviction, stay agile, and make smarter investment decisions as new facts emerge.

Do you think there's more to the story for DICK'S Sporting Goods? 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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