Academy Sports and Outdoors, Inc. : The trend should regain control

08/25/2021 | 02:40am EDT

Jordan Dufee

long trade Target price hit

Entry price : 42.5$ | Target : 50$ | Stop-loss : 33$ | Potential : 17.65%

The current trading zone is interesting to the point that investors should pay attention to the stock and anticipate a return of the underlying upward trend. Investors have an opportunity to buy the stock and target the $ 50.

Summary

• The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.
• The company presents an interesting fundamental situation from a short-term investment perspective.

Strengths

• Its low valuation, with P/E ratio at 8.14 and 8.77 for the ongoing fiscal year and 2023 respectively, makes the stock pretty attractive with regard to earnings multiples.
• The stock, which is currently worth 2022 to 0.63 times its sales, is clearly overvalued in comparison with peers.
• The company has a low valuation given the cash flows generated by its activity.
• Over the past year, analysts have regularly revised upwards their sales forecast for the company.
• Over the last 4 months, analysts have significantly revised upwards the company's estimated sales.
• For the last twelve months, analysts have been gradually revising upwards their EPS forecast for the upcoming fiscal year.
• For the last 4 months, the company has been enjoying highly positive EPS revisions, which were frequently and significantly raised.
• Analysts covering this company mostly recommend stock overweighting or purchase.
• The average price target of analysts who are interested in the stock has been strongly revised upwards over the last four months.
• There is high visibility into the group's activities for the coming years. Outlooks on future revenues from analysts covering the equity remain similar. Such hardly dispersed estimates support highly predictable sales for the current and upcoming fiscal years.

Weaknesses

• According to forecast, a sluggish sales growth is expected for the next fiscal years.
• The company's currently anticipated earnings per share (EPS) growth for the next few years is a notable weakness.
• The overall consensus opinion of analysts has deteriorated sharply over the past four months.
• Over the past twelve months, analysts' opinions have been revised negatively.

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