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A look at DICK’S Sporting Goods’ (DKS) valuation after weak guidance and a revenue miss unsettle near-term expectations

Simply Wall St · 2d ago

Weak guidance keeps DICK'S Sporting Goods (DKS) stock in check

DICK'S Sporting Goods (DKS) just posted a quarter where revenue fell short of expectations and full year guidance came in soft, raising fresh questions about how sustainable its recent growth streak really is.

See our latest analysis for DICK'S Sporting Goods.

Despite the weak outlook, the stock is still changing hands at about $210.39. While the year to date share price return is negative, the three and five year total shareholder returns above 100% highlight that the longer term momentum story is intact even if near term enthusiasm has cooled.

If this kind of sentiment reset has you rethinking your shopping basket, it could be a good time to explore fast growing stocks with high insider ownership for fresh ideas with stronger perceived momentum.

With growth still outpacing many peers, but guidance underwhelming and the stock trading below analyst targets, is DICK'S Sporting Goods now quietly undervalued, or is the market already correctly pricing in its future growth?

Most Popular Narrative Narrative: 11.0% Undervalued

With the narrative fair value sitting meaningfully above the last close, the current pullback is framed as an opportunity rather than a warning sign.

The acquisition of Foot Locker is set to expand DICK'S total addressable market, broaden its consumer base, strengthen vendor relationships, and offer synergies (targeting $100 to $125M), all of which are likely to accelerate top line growth and operating earnings post-integration.

Read the complete narrative.

Curious how modest revenue growth assumptions, firmer margins, and a richer future earnings multiple can still point to upside? See how this narrative connects the dots.

Result: Fair Value of $236.48 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, integration missteps with Foot Locker and heavier fixed costs from new store formats could easily derail the margin and earnings upside that are embedded in this view.

Find out about the key risks to this DICK'S Sporting Goods narrative.

Build Your Own DICK'S Sporting Goods Narrative

If you see the story differently or want to stress test the assumptions with your own inputs, you can build a custom view in under three minutes at Do it your way.

A great starting point for your DICK'S Sporting Goods research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.