Academy Sports and Outdoors, Inc. (ASO): what the price requires
The current priced-in claim for Academy Sports and Outdoors, Inc. (ASO) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/ASO
Headline
| Field | Value |
|---|---|
| Ticker | ASO |
| Company | Academy Sports and Outdoors, Inc. |
| Current price | $46.26/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 2.1% |
| Operating margin today | 7.2% |
| Margin compression implied | -5.1pp |
| Multiple paid | 11x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 8.6% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.64σ |
| cohort percentile (of 210 peers) | 18 |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 0.72x | 5 | justifies |
| Earnings | 0.76x | 5 | justifies |
| Relative | 0.45x | 5 | justifies |
| Growth | 0.94x | 3 | justifies |
Families that justify the price: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.1%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $84.41 | 0.55x | yes | FCF base $0.2B, growth 4% (input: historical growth), terminal g 3.9%, WACC 7.1%, 5yr projection |
| DCF Exit Multiple | Growth | $48.99 | 0.94x | yes | Exit EV/EBITDA: 5.3x / 7.3x / 9.3x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $101.67 | 0.45x | yes | P/E 15.18x (blended: static sector reference 20x + trailing (TTM) 8x), scenarios: 12.7x / 15.2x / 17.6x (bear / base = reference held flat / bull), EV/EBITDA 14x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $62.85 | 0.74x | yes | BV/sh $32.16, ROE (TTM) 18.1%, ke 9.3% |
| Two-Stage Excess Return | Asset | $86.75 | 0.53x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $34.03 | 1.36x | yes | Rev $6.1B, growth 4% (input: historical growth; tapered), Terminal P/S: 0.4x / 0.5x / 0.6x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $67.92 | 0.68x | yes | EPS $5.66, growth 8% (input: historical EPS growth), PEG=1.05 (Fair) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $83.48 | 0.55x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.66B × (1−23%) / WACC 7.1% → EPV (no growth) |
| Residual Income | Asset | $86.14 | 0.54x | yes | BV $32.16 + 5yr PV of (ROE (TTM) 18.1% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $64.00 | 0.72x | yes | √(22.5 × EPS $5.66 × BVPS $32.16) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $111.64 | 0.41x | yes | EBITDA $0.64B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | $14.42 | 3.21x | yes | FCF $237.2M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $9.86 | 4.69x | yes | SBC-adj FCF $0.21B (FCF $0.24B − SBC $0.03B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $112.31 | 0.41x | yes | EPS $5.66 × (8.5 + 2×7.6%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $6.90 | 6.70x | yes | BV $32.16 × (ROIC 1.5% / WACC 7.1%) |
| P/Sales Sector | Relative | $139.75 | 0.33x | yes | Revenue $6.14B × sector P/S 1.5x |
| PEG Fair Value | Relative | $64.42 | 0.72x | yes | EPS $5.66 × (PEG 1.5 × growth 7.6% (input: historical EPS growth)) → PE 11.4x |
| Earnings Yield | Earnings | $61.19 | 0.76x | yes | EPS $5.66 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $145.5m |
| Net debt / NOPAT (after-tax) | 0.46x |
| Net debt / operating income (pre-tax) | 0.35x |
| Share count CAGR (buyback) | -7.1% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- Academy Sports + Outdoors is a sporting-goods and outdoor retailer earning an 8% operating margin with almost no net debt, an unusually strong profile for a discretionary retailer.
- The price tells a story the numbers do not: at about 12 times operating income it implies the business shrinks slightly for years, even as Q1 2026 comparable sales grew 2.9% and the company raised full-year guidance.
- Capital is going back to owners hard: the share count has shrunk about 7% a year, with another 1.7 million shares repurchased in the quarter alongside continued store expansion.
Bull Case
The counterintuitive fact about Academy is how good the economics are for something priced like a struggling retailer. It earns an 8.4% operating margin and an 18% return on equity, carries almost no net debt, and generates real free cash flow, the financial profile of a healthy, well-run business rather than a value trap. Retailers with margins and returns this strong usually command a premium multiple; Academy trades at roughly 12 times operating income, around nine times earnings, well below where its own peers and most valuation methods place it. That gap between quality and price is the entire bull case.
The business is also still growing, which undercuts the decline the price assumes. First-quarter fiscal 2026 net sales rose 6.7% to $1.44 billion, comparable sales grew 2.9%, and eCommerce sales jumped 17.4%. The growth is coming from both the existing base and new stores, and management noted new-store comparable performance in the high single digits, with 15 to 20 store openings planned for the back half of the year focused on legacy markets. The filing describes comparable sales as the measure of stores "open after thirteen full fiscal months," the metric that strips out new-store noise, and that core measure is positive.
The capital allocation is the proof of management's conviction. The company repurchased about 1.7 million shares in the quarter, paid a dividend, and kept investing in stores, omnichannel, and technology. Buying back roughly 7% of the shares a year at nine times earnings is high-return capital allocation: each repurchased share retires far more earnings power than it would at a normal retail multiple, so even flat company earnings translate into rising earnings per share. With minimal leverage, the buyback is funded from cash flow rather than borrowing. The bull case is a profitable, cash-generative retailer growing comps and store count while shrinking its share count aggressively, all at a price that assumes the opposite.
Bear Case
The risk that matters most for Academy is the one it shares with every discretionary retailer: it sells things people buy when they feel financially comfortable and skip when they do not. Sporting goods, outdoor gear, apparel, and firearms accessories are postponable purchases, so a consumer pullback, driven by inflation, a weakening job market, or simply softer confidence, hits Academy's sales directly. The current comparable-sales growth is modest at 2.9%, and the company's own raised guidance still calls for full-year comps of only flat to 2%, which is the profile of a business near the top of a consumer cycle rather than accelerating out of a trough. Peak retail earnings are not durable retail earnings, and the price, while low, is being set against a margin that a recession would compress.
The competitive position is the structural concern. The filing is candid that Academy's competitors "include many large companies, some of which have substantially greater market presence, name recognition and financial, marketing and other resources than us". It competes against national sporting-goods chains, mass merchants, and online giants, all of which can undercut on price or out-invest on logistics. A regional retailer's margin advantage is only as safe as the largest competitor's willingness to chase its customers, and in sporting goods those competitors are formidable.
The growth strategy carries its own execution risk. The filing warns that if the company enters new markets, "our sales could decrease and our operating costs could increase," and that there "can be no assurance that we will be able to continue our expansion plans successfully". Opening 15 to 20 stores a year into a maturing footprint risks cannibalizing existing locations or diluting the returns that make the current model attractive. The price implies a slight decline, which sounds pessimistic, but for a cyclical retailer near peak margins facing larger competitors, a flat-to-down scenario in the next consumer downturn is exactly what the discount is guarding against. Cheap is not the same as safe when the earnings being capitalized are cyclical.
Valuation
What the price is betting is notably bearish for a business this healthy. At about $51.86 (June 27, 2026) a share, Academy trades near 12 times company-wide operating income, which inverts to roughly negative 2% operating growth a year for five years. Keep that approximate; it is one solve under fixed assumptions. The plain reading is that the market is pricing a gentle, multi-year decline, even though the company just grew comparable sales and raised guidance. For a cyclical retailer, pricing in some fade is reasonable; pricing in outright decline against current growth is the gap the bull case points at.
The methods land mostly well above the price, the classic value-supported pattern. The relative-multiple family, using a sector price-to-earnings near 20 times blended against the depressed trailing multiple, lands near $102. The earnings-power family, capitalizing normalized operating income, lands near $81. The asset-based excess-return approaches land near $62 to $86, anchored on a book value of about $32 a share and an 18% return on equity. Only the future-market-cap model, which extrapolates slow growth, lands below the price. Read together, the methods that value the business on its current earnings power and peer multiples sit far above the price, while the one that projects stagnation sits at it. The disagreement is the bet: pay 12 times and you are wagering earnings hold rather than fade.
Solvency is a clear strength rather than a worry. Net debt is just 0.28 times operating income, essentially a clean balance sheet, which is why the company can fund buybacks, a dividend, and store growth simultaneously from cash flow. The decisive question the valuation poses is purely about the consumer cycle: at nine times earnings with a fortress balance sheet, the stock is priced for decline, so the return depends on whether discretionary demand holds up enough to keep comps positive and margins intact. If it does, the gap to the earnings-based methods in the $60s to $80s is the upside; if a recession compresses the margin, the low multiple is the cushion, and the minimal leverage means the downside is bounded.
Catalysts
First-quarter fiscal 2026 results came with a guidance raise. Net sales rose 6.7% to $1.44 billion, comparable sales grew 2.9%, and eCommerce sales jumped 17.4%, while GAAP diluted earnings per share rose 17.6% to $0.80. The adjusted figure was $0.93, a company-defined measure; the GAAP number is the relevant one for trailing comparisons. The company opened two stores in the quarter, with three more planned for the second quarter and 15 to 20 in the back half, weighted toward legacy markets.
The forward catalysts are the raised outlook and capital returns. Management lifted full-year fiscal 2026 net sales guidance to $6.23 billion to $6.35 billion, comparable sales to flat-to-2%, and GAAP earnings per share to $5.95 to $6.35. During the quarter the company repurchased about 1.7 million shares and paid a dividend while continuing to invest in stores and omnichannel. The metrics to watch over the coming quarters are whether comparable sales stay positive as consumer spending is tested, whether new-store productivity holds up as the footprint expands, and how aggressively the buyback keeps shrinking the share count while the price sits at a single-digit earnings multiple.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- DKS (DICK'S Sporting Goods, Inc.)
- (no filing in the citation store)
- GAP (GAP, INC)
- (no filing in the citation store)
- ROST (Ross Stores, Inc.)
- (no filing in the citation store)
- AEO (American Eagle Outfitters, Inc.)
- (no filing in the citation store)
- SIG (SIGNET JEWELERS LIMITED)
- (no filing in the citation store)
- SBH (SALLY BEAUTY HOLDINGS, INC.)
- (no filing in the citation store)
- VSCO (VICTORIA'S SECRET & CO.)
- (no filing in the citation store)
- LZB (LA-Z-BOY INCORPORATED)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 2026 results, June 2026 · FY2025 10-K