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Academy Sports And Outdoors (ASO) Stock May Be Below Fair Value After Raised Profit Forecast

Simply Wall St · 3d ago

Academy Sports and Outdoors has delivered a mix of steady long term returns and fresh earnings momentum, which puts a clear question in front of anyone looking at the stock today. With the business leaning on e-commerce growth, new stores and profit gains, the issue is whether the current share price lines up with what its earnings can support.

  • Over the past 5 years, Academy Sports and Outdoors has returned roughly 23%, which puts real weight on whether those gains are backed by its earnings power.
  • Recent profit growth helped by stronger margins, e-commerce expansion and tariff refunds may support expectations for what the retailer can earn in the years ahead.
  • Your read on Academy Sports and Outdoors is one view; the desks covering it have another. See what analysts think Academy Sports and Outdoors's shares could be worth.

The stock's next move may depend on whether Academy Sports and Outdoors' current earnings justify where the shares trade today.

To pressure test Academy Sports and Outdoors alongside other earnings led stories, start with a focused screen of 34 high quality undervalued stocks as a fresh set of ideas.

Is Academy Sports and Outdoors Still Cheap on Earnings?

The P/E ratio is a useful way to sanity check what you are paying for each dollar of Academy Sports and Outdoors earnings. On this measure, the retailer trades at about 7.8x, which is well below both the Specialty Retail industry average of roughly 15.7x and the peer group near 11.9x.

Because the recent tariff refund and e-commerce lift supported stronger profitability, the gap between the current 7.8x multiple and what a tailored model suggests for Academy Sports and Outdoors points to the shares pricing in a lower earnings profile than that framework implies. The Fair Ratio, which blends the company’s growth outlook, margins, size and risk into an expected P/E, sits above where the stock currently trades. As a result, the valuation screens as undervalued on this earnings yardstick. Despite the raised profit guidance and capital returns, the market is still assigning a discount to what the P/E based Fair Ratio indicates could be justified for the business. Explore the numbers behind Academy Sports and Outdoors's P/E valuation.

NasdaqGS:ASO P/E Ratio as at Sep 2026
NasdaqGS:ASO P/E Ratio as at Sep 2026

The Academy Sports and Outdoors Narrative: What Would Justify Today's Price?

Simply Wall St Narratives pick up where the P/E puzzle for Academy Sports and Outdoors leaves off by explaining which growth, margin and earnings paths would need to hold for the stock to trade meaningfully above or below today's level. Each narrative frames its fair value as a concrete, testable idea about the business that you can watch evolve over time on the Community page.

Community views on Academy Sports and Outdoors are split between one camp that sees more upside left in the story and another that thinks current pricing already captures most of the opportunity.

Bull case: 18% undervalued

"Rapid e-commerce growth and store expansion into underserved markets are enhancing market share, revenue prospects, and operating leverage..."

Discover why this Narrative puts Academy Sports and Outdoors at 18% undervalued.

Bear case: roughly fairly valued

"Lagging digital transformation and continued reliance on physical stores threaten revenue growth and profitability amid rising e-commerce competition and shifting consumer behaviors..."

Explore why this Narrative puts Academy Sports and Outdoors at roughly fairly valued.

The price of Academy Sports and Outdoors is only one piece of the decision

Valuation tells you what the market is paying today, but analyst expectations for Academy Sports and Outdoors a few years from now offer a separate lens on what that price implies. Explore where analysts expect Academy Sports and Outdoors to be in a few years.

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.