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How Dick’s Sporting Goods’ Valuation Compares with Peers’

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Updated

Forward PE ratios

As of yesterday, Dick’s Sporting Goods’ (DKS) 12-month forward PE ratio, a metric used for making investment decisions for companies within the same sector, was 11.4x. Meanwhile, Foot Locker’s (FL) ratio was lower at 10.1x, and Hibbett Sports (HIBB) was on par with Dick’s Sporting Goods’. Big 5 Sporting Goods (BGFV) had a higher ratio, of 14.3x.

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Growth projections

Analysts expect Dick’s Sporting Goods’ sales to fall 1.4% to $8.5 billion in fiscal 2018, and its adjusted EPS to rise 4.0% to $3.13. In fiscal 2019, they expect its sales to rise 2.4% and its adjusted EPS to rise 5.1% to $3.29.

Dick’s Sporting Goods is making several investments toward enhancing its digital and omnichannel capabilities. The company has also been assigning more store space to private brands, enhancing its page layout, and working on a faster checkout process. However, rising costs continue to be a drag, and its hunting and electronics categories have been weak.

Projections for peers’ top and bottom lines 

In fiscal 2018, analysts expect Foot Locker’s sales to rise 0.3% to $7.80 billion, and its adjusted EPS to rise 9.2% to $4.49. The company continues to expect double-digit percentage growth in its EPS, driven by premium product sales.

Analysts expect Hibbett Sports’ sales to fall 1.7% to $951.3 million in fiscal 2019, and its adjusted EPS to rise 0.6% to $1.54. The company expects fiscal 2019 EPS of $1.57–$1.75. In fiscal 2018, analysts expect Big 5 Sporting Goods’ sales to decrease marginally to $1.0 billion, and its EPS to fall 53.6% to $0.26.

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