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How Does Dick’s Sporting Goods Look in Terms of Valuation?

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Jan. 11 2018, Updated 7:31 a.m. ET

Forward PE

As of January 3, 2018, Dick’s Sporting Goods (DKS) was trading at a 12-month forward PE (price-to-earnings) ratio of 12.1x. Following its fiscal 3Q17 results, the valuation multiple for Dick’s Sporting Goods has increased 22.6%.

The company is trading at a lower valuation multiple in comparison with Hibbett Sports (HIBB), which is trading at a 12-month forward PE ratio of 14.2x. Foot Locker (FL) and Big 5 Sporting Goods (BGFV) were trading at 11.7x and 9.0x, respectively, as of January 3, 2018, which is lower than the PE multiple for Dick’s Sporting Goods.

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Analysts’ growth estimates

Analysts expect Dick’s Sporting Goods’ fiscal 2017 revenues to be $8.6 billion, up 9.0% while fiscal 2018 revenues are expected to be up 1.6% to $8.8 billion. For fiscal 2017, the company’s EPS could fall 4.6% to $2.98 on an adjusted basis. For fiscal 2018, its earnings per share are projected to decline 17.2% to $2.46.

For fiscal 2018, Dick’s Sporting Goods expects a promotional environment as well as strategic initiatives to mar earnings by as much as 20.0%.

Peer comparisons

For Hibbett Sports, analysts project its fiscal 2018 revenues to decline 1.4% to $959.4 million and its EPS to fall 45.3% to $1.49. For fiscal 2019, its revenues are projected to be down 0.1% to $958.7 million and its EPS could grow 4.3% to $1.55.

For Foot Locker in fiscal 2017, analysts expect revenues to be up 0.3% to $7.8 billion, and its EPS are projected to be down 15.5% to $4.07. For fiscal 2018, analysts expect its revenues to decrease 1.0% to $7.7 billion while its earnings are projected to increase 1.1% to $4.12 per share.

For fiscal 2017, analysts estimate Big 5 Sporting Goods’ revenues to increase 0.9% to $1.0 billion while its EPS are expected to rise 8.5% to $0.89. The company’s fiscal 2018 revenues are projected to be up 1.6% to $1.1 billion and EPS to decline 5.1% to $0.85.

In the last part of this series, we’ll take a look at what analysts have to say about Dick’s Sporting Goods stock.

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