Academy Sports and Outdoors, Inc. (NASDAQ:ASO) is expected to report a decline in earnings and revenues for the quarter ending October 2024, according to Zacks Investment Research.
The company boasts a price-to-earnings (P/E) ratio of approximately 7.29 and a price-to-sales ratio of about 0.57, indicating a potentially undervalued stock.
ASO’s financial health is supported by a debt-to-equity ratio of 0.31 and a current ratio of 1.66, suggesting a conservative use of debt and healthy liquidity levels.
Academy Sports and Outdoors, Inc. (NASDAQ:ASO) is a well-known retailer specializing in sporting goods and outdoor recreational products. As a key player in the retail industry, ASO competes with other major retailers like Dick’s Sporting Goods and Bass Pro Shops. The company is set to release its quarterly earnings on December 10, 2024, with Wall Street estimating an earnings per share (EPS) of $1.30 and projected revenue of approximately $1.38 billion.
However, as highlighted by Zacks Investment Research, ASO is anticipated to report a decline in earnings and lower revenues for the quarter ending October 2024. This potential shortfall could influence the stock’s movement, depending on whether the actual results exceed or fall short of these estimates. The market’s consensus outlook is crucial for evaluating the company’s earnings potential, but the actual results compared to these expectations will significantly impact ASO’s near-term stock price.
ASO’s financial metrics provide insight into its current valuation. The company has a price-to-earnings (P/E) ratio of approximately 7.29, indicating a relatively low valuation compared to its earnings. This suggests that the market may be undervaluing ASO’s earnings potential. Additionally, the price-to-sales ratio of about 0.57 implies that the market values its sales modestly, which could be a point of concern if revenues continue to decline.
The enterprise value to sales ratio of 0.79 shows that ASO’s enterprise value is slightly higher than its total sales, while the enterprise value to operating cash flow ratio of 8.31 reflects the company’s ability to generate cash flow relative to its enterprise value. These metrics suggest that ASO is managing its resources effectively, despite the anticipated decline in earnings and revenues.
ASO’s financial health is further supported by its debt-to-equity ratio of 0.31, indicating a conservative use of debt in its capital structure. The current ratio of 1.66 suggests that ASO has a healthy level of liquidity to cover its short-term liabilities. These factors, along with an earnings yield of 13.72%, highlight ASO’s potential for return on investment for shareholders, even amidst the challenges of declining earnings and revenues.
