ACADEMY SPORTS & OUTDOORS INC (NASDAQ:ASO) – A Potentially Undervalued Retail Stock

ACADEMY SPORTS & OUTDOORS INC (NASDAQ:ASO) stands out as an interesting candidate for value investors, according to our fundamental screening. The company combines a low valuation with solid profitability and financial health, making it worth a closer look.

Key Strengths

• Attractive Valuation: ASO trades at a Price/Earnings (P/E) ratio of 8.25, significantly below both the industry average (56.06) and the S&P 500 (27.45). Its Price/Forward Earnings ratio of 7.22 also suggests the stock is priced conservatively.
• Strong Profitability: The company earns an 8/10 Profitability Rating, with a Return on Equity (ROE) of 19.93% and a solid Profit Margin of 6.55%, outperforming most peers.
• Healthy Financials: ASO maintains a manageable Debt/Equity ratio of 0.25 and has reduced its share count over time, signaling disciplined capital management.
• Reasonable Growth Prospects: While recent earnings dipped, analysts expect an 8.68% annual EPS growth over the next few years, with revenue projected to rise by 6.21%.

Considerations

• Recent Earnings Decline: EPS fell by 15.24% in the past year, though long-term growth trends remain positive.
• Modest Dividend: ASO offers a 1.05% yield, below the S&P 500 average, but its payout ratio of 8.25% is sustainable.

For a deeper dive into ASO’s financials, review the full fundamental report.

Our Decent Value screener lists more stocks with similar value characteristics.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should conduct your own analysis before making investment decisions.