Should You Think About Buying DICK'S Sporting Goods, Inc. (NYSE:DKS) Now?
Simply Wall St · 01/29 10:59

DICK'S Sporting Goods, Inc. (NYSE:DKS) saw a significant share price rise of 51% in the past couple of months on the NYSE. The recent jump in the share price has meant that the company is trading at close to its 52-week high. As a large-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? Let’s take a look at DICK'S Sporting Goods’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for DICK'S Sporting Goods

Is DICK'S Sporting Goods Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 0.5% below our intrinsic value, which means if you buy DICK'S Sporting Goods today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $153.86, then there isn’t much room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? 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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from DICK'S Sporting Goods?

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NYSE:DKS Earnings and Revenue Growth January 29th 2024

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. Though in the case of DICK'S Sporting Goods, it is expected to deliver a relatively unexciting earnings growth of 9.8%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in DKS’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on DKS, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. You'd be interested to know, that we found 1 warning sign for DICK'S Sporting Goods and you'll want to know about it.

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.