Stock Analysis

What Is DICK'S Sporting Goods, Inc.'s (NYSE:DKS) Share Price Doing?

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NYSE:DKS
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DICK'S Sporting Goods, Inc. (NYSE:DKS), is not the largest company out there, but it led the NYSE gainers with a relatively large price hike in the past couple of weeks. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on DICK'S Sporting Goods’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for DICK'S Sporting Goods

Is DICK'S Sporting Goods Still Cheap?

Great news for investors – DICK'S Sporting Goods is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $165.19, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that DICK'S Sporting Goods’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of DICK'S Sporting Goods look like?

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NYSE:DKS Earnings and Revenue Growth August 12th 2022

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for DICK'S Sporting Goods, at least in the near future.

What This Means For You

Are you a shareholder? Although DKS is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to DKS, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on DKS for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you'd like to know more about DICK'S Sporting Goods as a business, it's important to be aware of any risks it's facing. Be aware that DICK'S Sporting Goods is showing 3 warning signs in our investment analysis and 2 of those are concerning...

If you are no longer interested in DICK'S Sporting Goods, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

What are the risks and opportunities for DICK'S Sporting Goods?

DICK'S Sporting Goods, Inc., together with its subsidiaries, operates as a sporting goods retailer primarily in the eastern United States.

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Rewards

  • Trading at 8.4% below our estimate of its fair value

Risks

  • High level of non-cash earnings

  • Significant insider selling over the past 3 months

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DICK'S Sporting Goods

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