Dick’s Sporting Goods, Inc (DKS) has an impressive earnings history and analysts are expecting double-digit growth for the foreseeable future. The industry is doing well and the stock is priced to move.
Company Description
Dick’s Sporting Goods is a full-line sporting goods retailing offering just about everything from running shoes and yoga mats to crossbows and hunting gear. There are over 500 locations in the U.S., including 81 Golf Galaxy stores.
Excellent Earnings History
Dick’s Sporting Goods has topped earnings estimates in all but one quarter for the past 5 years. The latest earnings beat came back on Aug 16 when the company reported a 21% gain in EPS to $0.52. That was 2 cents higher than the Zacks Consensus Estimate.
Net sales rose 6.6% to $1.3 billion, partially driven by a 2.5% improvement in same-store sales. E-commerce was up an impressive 32% as the company ramps up its online offerings.
Double-Digit Growth
Analysts are optimistic about the company’s future, with current estimates averaging $1.95 for this year. Next year’s Zacks Consensus Estimate is at $2.28. Last year Dick’s made $1.63, which puts expected growth rates at 20% and 17%, respectively.
Priced Right
Shares of DKS are going for 18 times forward estimates, which puts the PEG ratio right near 1.1. The price-to-sales ratio is 0.8 times and the stock is going for less than 3 times book value.
Industry Looks Strong
While many are worried that consumers will pull back with growing economic fears, the retailers are doing pretty well as a whole. Dick’s Sporting Goods and its peers are ranked 18th out of 265 industry groups.
The Chart
There has been quite a bit of noise when you take a look at the share price. But, those colored lines are good depiction of the stability and growth we are seeing in the earnings estimates. That should ultimately lead to gains for this Zacks #1 Rank (Strong Buy).
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service
