DICK'S Sporting Goods, Inc. (DKS): what the price requires
At today's price, DICK'S Sporting Goods, Inc. (DKS) is priced for +8.2% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/DKS
Headline
| Field | Value |
|---|---|
| Ticker | DKS |
| Company | DICK'S Sporting Goods, Inc. |
| Current price | $215.65/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 | 1.5% |
| Operating margin today | 8.4% |
| Margin compression implied | -6.9pp |
| Implied growth | 8.2% |
| Multiple paid | 19x 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.
Solve inputs: computed at a 8.2% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7.1pp.
Reconcile: at the x-ray's 9.3% required return this reads ~15.4%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.30σ |
| cohort percentile (of 212 peers) | 56 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
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 | 1.80x | 5 | expensive |
| Earnings | 1.97x | 2 | expensive |
| Relative | 1.05x | 3 | expensive |
| Growth | 0.57x | 3 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.2%); the inversion above states its own rate.
Per-Model Detail (n=13)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $997.83 | 0.22x | yes | FCF base $1.5B, growth 25% (input: historical growth), terminal g 4.0%, WACC 7.2%, 7yr projection |
| DCF Exit Multiple | Growth | $381.05 | 0.57x | yes | Exit EV/EBITDA: 13.7x / 16.7x / 19.7x (bear / base = today's held flat / bull), 7yr |
| Relative Valuation | Relative | $206.30 | 1.05x | yes | P/E 20x (static sector reference · 2026-04), scenarios: 16.0x / 20.0x / 24.0x (bear / base = reference held flat / bull), EV/EBITDA 14x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $108.19 | 1.99x | yes | BV/sh $61.99, ROE (TTM) 16.1%, ke 9.3% |
| Two-Stage Excess Return | Asset | $141.11 | 1.53x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $312.91 | 0.69x | yes | Rev $19.2B, growth 30% (input: historical growth; tapered), Terminal P/S: 0.8x / 1.0x / 1.2x (bear / base = today's held flat / bull, cap 12x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $108.25 | 1.99x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $1.46B × (1−28%) / WACC 7.2% → EPV (no growth) |
| Residual Income | Asset | $143.25 | 1.51x | yes | BV $61.99 + 5yr PV of (ROE (TTM) 16.1% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $119.68 | 1.80x | yes | √(22.5 × EPS $10.27 × BVPS $61.99) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $172.40 | 1.25x | yes | EBITDA $1.46B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | $0.01 | 21565.00x | yes | FCF $402.6M / Kₑ 9.3% — zero-growth perpetuity (excluded from median) |
| SBC-Adj FCF Yield | Earnings | $0.01 | 21565.00x | yes | SBC-adj FCF $0.27B (FCF $0.40B − SBC $0.13B) capitalized at Kₑ (excluded from median) |
| Ben Graham Formula | Earnings | $8.61 | 25.05x | yes | EPS $10.27 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | $26.67 | 8.09x | yes | BV $61.99 × (ROIC 3.1% / WACC 7.2%) |
| P/Sales Sector | Relative | $318.64 | 0.68x | yes | Revenue $19.20B × sector P/S 1.5x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $111.03 | 1.94x | yes | EPS $10.27 / 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 | $941.0m |
| Net debt / NOPAT (after-tax) | 0.96x |
| Net debt / operating income (pre-tax) | 0.69x |
| Interest coverage | 21.2x |
| Share count CAGR (buyback) | -4.5% |
| Burning cash | no |
Bullet Takeaways
At about $233 the price inverts to roughly 12% operating-profit growth a year over five years, with no real margin expansion required. For a retailer that just grew comparable sales 6% in its core banner and turned its newly acquired Foot Locker business positive, that is a within-range bar rather than a stretch.
The balance sheet is strong. Net debt is about $941 million against $1.18 billion of trailing operating income, so leverage is under one turn, and interest coverage is roughly 17 times. That gives the company room to absorb the Foot Locker integration.
The conservative valuation methods point lower than the price. Asset-based and earnings-power frames land in the low-to-mid $100s, so the stock is not cheap on what the business has already earned; it is supported by the relative multiple and the forward-growth case.
Bull Case
What the standard valuation models miss about DICK'S is that it has quietly turned a big-box sporting-goods chain into an experiential retailer, and the gap between the spreadsheet and the store is where the bull case lives. The models see a consumer-cyclical retailer with a 6% operating margin and price it on multiples. What they cannot easily capture is the format shift the company has been building: House of Sport locations with in-store batting cages, golf simulators, and full-service footwear decks, the kind of differentiated experience the filings describe as an elevated experience for athletes powered by technology (DICK'S FY2025 10-K, accession 0001089063-25-000012). Premium footwear decks are now in roughly 90% of stores (DICK'S FY2025 10-K, accession 0001089063-25-000012). Those are traffic and basket drivers a peer-multiple model treats as just more square footage.
The recent numbers show the strategy working. First-quarter 2026 net sales reached $5.16 billion, up nearly 63%, of which the core DICK'S business grew comparable sales 6%, made up of a 5.5% larger average ticket and a 0.5% rise in transactions. Net income rose to $319.8 million, or $3.54 a share, from $3.24 a year earlier. The company opened 16 new House of Sport locations in 2025, ending the year with 35 and planning about 14 more in 2026. That is a profitable retailer reinvesting cash flow into a format that is lifting both ticket and traffic, which is exactly the durable comp engine the static models discount.
The Foot Locker acquisition is the bigger swing, and the early read is encouraging. The deal added $1.79 billion to first-quarter sales, and Foot Locker posted its first positive global comp since late 2024, up 0.6% globally with the U.S. banner up 6.4%, the first quarter of positive U.S. comps in over a year. DICK'S raised both banner growth ranges and reaffirmed adjusted EPS guidance of $13.50 to $14.50. The bull thesis is that the company's experiential playbook, its sneaker-culture reach, and its scale combine to make Foot Locker worth more inside DICK'S than it was alone, and that the implied 12% operating-profit growth the price requires is achievable without heroic margin assumptions. Analysts have moved targets into a roughly $220 to $280 range, with some blended models reaching the high $290s.
Bear Case
Read the valuation methods against each other and the conservative ones are the more honest. The asset-based frame anchored on a roughly $62 book value lands around $108 to $143, the earnings-power value sits near $106, and the Graham number near $120. Every method that takes today's earnings and balance sheet at face value prints well below the $233 price (June 27, 2026). Only the relative multiple, at about $206 on a sector P/E, and the forward-growth DCFs reach or exceed the price. When the spread is that wide and only the growth-dependent methods justify the quote, the cautious read is that the stock has already priced in the integration going well.
The integration is the reason to be cautious. Folding in Foot Locker nearly doubled the revenue base in a single quarter, and a roughly 63% jump in sales is the kind of step-change that can paper over the harder work of merging two retail cultures, store fleets, and supply chains. Notably, DICK'S trimmed its GAAP earnings-per-share guidance to $13.27 to $14.27 from $13.70 to $14.70 even as it held the adjusted range, a sign that the integration carries real costs the adjusted figure sets aside. Foot Locker's positive comp is one quarter; a multi-year turnaround of a mall-based footwear chain is a different undertaking, and the market is extrapolating from a thin sample.
The macro backdrop adds to the caution. Sporting-goods retail is discretionary and tariff-exposed, with the company's own filings flagging the cost and availability of transportation and the fluctuations in fuel and shipping that hit a goods-importing retailer (DICK'S FY2025 10-K, accession 0001089063-25-000012). The current guidance already absorbs the tariffs in effect, but further trade friction or a consumer pullback would land directly on the ticket-driven comps the bull case leans on. With the price requiring roughly 12% operating-profit growth and the conservative methods clustered a third or more below it, the bet at $233 is that a near-doubled, mid-integration retailer compounds smoothly through a discretionary cycle, which is precisely the assumption the cautious methods refuse to make.
Valuation
At about $233 the price inverts to roughly 12% operating-profit growth a year over five years, with implied margin essentially flat against today's 6.1%. The solve runs at an 8.5% cost of capital, and it is sensitive: each percentage point of cost of capital moves the implied growth by roughly 7.1 points, so the figure is approximate. Against the company's own recent results the implied pace is within range; the comp engine and the Foot Locker addition can plausibly support it, with the open question being durability rather than the rate itself.
The model X-ray splits cleanly between the cautious and the optimistic. The asset-based and earnings-power methods cluster in the low-to-mid $100s: simple excess return near $108, residual income near $143, the Graham number near $120, and earnings-power value near $106, all below the price. The relative method lands near $206 on a 20-times sector P/E, just under the quote. The forward-growth methods are the ones that reach and exceed: the exit-multiple DCF near $397 and the future-market-cap projection near $338, while the perpetual-growth DCF prints an implausible figure off an inflated growth input and should be set aside.
That is the classic profile of a quality retailer pricing in continued execution. The bet at $233 is that the experiential format keeps lifting comps and that Foot Locker is worth more inside the company than out, not that the shares are cheap on trailing earnings, where they are not.
Catalysts
First-quarter 2026 results, reported May 27, were the most recent catalyst. Consolidated net sales rose 62.7% to $5.16 billion, including $1.79 billion from the newly acquired Foot Locker business and a 6% comparable-sales gain in the core DICK'S banner. Net income was $319.8 million, or $3.54 a share. Foot Locker posted its first positive global comp since late 2024, up 0.6% globally and 6.4% in the U.S. banner. DICK'S raised both banner growth ranges, trimmed GAAP EPS guidance to $13.27 to $14.27, and reaffirmed adjusted EPS of $13.50 to $14.50.
The forward catalysts center on the Foot Locker integration and store-format expansion. The company is running a Fast Break remodel pilot at Foot Locker, expanded in early 2026 from eleven to an additional ten stores, and continues to roll out House of Sport, planning about 14 new locations in 2026 on top of the 35 open at year-end 2025. Analysts also point to potential World Cup-related demand as a 2026 support. The watch items are the next quarterly comp prints for both banners, the pace and cost of the Foot Locker integration, House of Sport productivity, and any change in tariffs or discretionary consumer spending that would pressure the ticket-driven comps.
Peer Cohorts (Per Segment, With Filing Citations)
DICK'S Sporting Goods (consolidated) (reported)
- ASO (Academy Sports and Outdoors, Inc.)
- FY2025 10-K: …to deposit with CBP duties relating to these products (the "AD/CVD deposits"), which are included in prepaid expenses and other current assets on the Company's Consolidated Balance Sheets. In January 2024, we requested a changed circumstances review of CBP's determination by the U.S. Department of Commerce (the…
- FY2025 10-K: . See Note 1 to the consolidated financial statements for information related to the products and services offered as well as business operations. The accounting policies of the Company's single reportable segment are the same as those described in the summary of significant accounting policies in Note 2 to the…
- YETI (YETI Holdings, Inc.)
- FY2025 10-K: …the United States, Canada, Australia, New Zealand, the United Kingdom, Europe, and Japan, among others. We carefully evaluate and select retail partners that have an image and approach that are consistent with our premium brand and pricing. Our national and regional specialty retailers in the United States include…
- FY2025 10-K: …product receipt, warehousing, certain limited product inspection activities, and coordinating outbound shipping. We manage our inventory levels by analyzing product sell-through, forecasting demand, and placing orders with our manufacturers before we receive firm orders from customers to ensure sufficient…
- GOLF (Acushnet Holdings Corp.)
- FY2025 10-K: …increase and concentrate our credit risk, put pressure on our margins and impair our ability to sell products. The sporting goods and off‑course golf equipment retail markets in some countries, including the United States, are dominated by a few large retailers. Certain of these retailers have in the past increased…
- FY2025 10-K: 15PlanMember us-gaap:CommonStockMember 2025-01-01 2025-12-31 0001672013 us-gaap:RestrictedStockUnitsRSUMember golf:OmnibusIncentive2015PlanMember us-gaap:CommonStockMember 2025-01-01 2025-12-31 0001672013 us-gaap:PerformanceSharesMember golf:OmnibusIncentive2015PlanMember us-gaap:CommonStockMember 2025-01-01…
- CALY (Callaway Golf Company)
- FY2025 10-K: …sales in 2025, 2024 and 2023, respectively. Consolidation of retailers or concentration of retail market share among a few retailers may increase and concentrate our credit risk, putting pressure on our margins and our ability to sell products relating to our golf equipment and apparel, gear and other business…
- FY2025 10-K: …and accessories business, the Callaway soft goods business and the OGIO business, which consists of golf apparel and accessories (including golf bags), and storage gear for sport and personal use. This segment also includes royalties from licensing of our trademarks and service marks for various soft goods products.…
- PTON (Peloton Interactive, Inc.)
- FY2025 10-K: …as we have concluded that it is more likely than not that the deferred assets will not be utilized. 46 Results of Operations The following tables set forth our consolidated results of operations in dollars and as a percentage of total revenue for the periods presented. The period-to-period comparisons of our…
- FY2025 10-K: …on the Company's Consolidated Balance Sheets and depreciates over the equipment's useful life. Depreciation expense associated with the underlying equipment is reflected in Connected Fitness Products Cost of revenue in the Company's Consolidated Statements of Operations and Comprehensive Loss. Non-lease components…
- ONON (On Holding AG)
- (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.