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Dick's Sporting Goods Inc DKS

Morningstar Rating
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Stock XNYS Rating as of
$227.64 +3.48 (1.55%)
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As of Delayed Price Closed
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Company Report

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Dick’s Sporting Goods Earnings: Strong Opening to 2024 Lights Up Scoreboard; Shares Expensive

David Swartz

Dick's Sporting Goods' 5.3% comparable sales growth beat our 2% estimate in 2024's first quarter. Its sales results were impressive given that many sportswear producers have reported subpar consumer demand lately, although relatively high operating costs suggest that it needed to spend more to drive sales. We expect to lift our $106 fair value by a high-single-digit percentage and believe that implied guidance for the rest of 2024 is overly cautious. However, we rate Dick's as a no-moat company given the competitiveness of sporting goods retail, and we believe its shares, up by a mid-teen percentage on the report, are overvalued.

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Price vs Fair Value

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DKS is trading at a 769% premium.
Price
$224.16
Fair Value
$367.00
Uncertainty
High
1-Star Price
$577.90
5-Star Price
$33.10
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Dick’s is the largest pure sporting goods chain in the US. It has a large loyalty program that is integrated with that of Nike. Boosted by its GameChanger app, Dick's has a strong business in high school and youth sports.

Bears

Key vendors of Dick’s, like Nike and Adidas, are reducing their dependence on wholesale sales by investing heavily in their own e-commerce and branded stores. A pullback from wholesale sales could have a negative impact.

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Trading Information

Previous Close Price
$224.16
Day Range
$219.55–227.68
52-Week Range
$100.98–229.56
Bid/Ask
$225.50 / $230.18
Market Cap
$18.62 Bil
Volume/Avg
2.5 Mil / 1.3 Mil

Key Statistics

Price/Earnings (Normalized)
17.49
Price/Sales
1.44
Dividend Yield (Trailing)
1.83%
Dividend Yield (Forward)
1.96%
Total Yield
5.66%

Company Profile

Dick’s Sporting Goods retails athletic apparel, footwear, and equipment for sports. Dick’s operates digital platforms, about 725 stores under its namesake brand (including outlet stores), and about 130 specialty stores under the Golf Galaxy and Public Lands nameplates. Dick’s carries private-label merchandise and national brands such as Nike, The North Face, Under Armour, Callaway Golf, and TaylorMade. Based in the Pittsburgh area, Dick’s was founded in 1948 by the father of current executive chairman and controlling shareholder Edward Stack.
Sector
Consumer Cyclical
Industry
Specialty Retail
Stock Style Box
Mid Core
Total Number of Employees
55,500
Website
https://www.dickssportinggoods.com

Competitors

Valuation

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Metric
DKS
M
WMT
Price/Earnings (Normalized)
 17.495.7529.35
Price/Book Value
 6.821.306.43
Price/Sales
 1.440.230.80
Price/Cash Flow
 12.602.9515.08
Price/Earnings
DKS
M
WMT

Financial Strength

Metric
DKS
M
WMT
Quick Ratio
 0.600.250.20
Current Ratio
 1.711.380.83
Interest Coverage
 24.451.068.94
Quick Ratio
DKS
M
WMT

Profitability

Metric
DKS
M
WMT
Return on Assets (Normalized)
 11.86%5.76%6.48%
Return on Equity (Normalized)
 42.65%23.45%20.75%
Return on Invested Capital (Normalized)
 16.82%11.22%12.00%
Return on Assets
DKS
M
WMT
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