ASO Stock Forecast & Price Target

Academy Sports and Outdoors Inc. demonstrates a robust sales composition within its merchandise division, with growth rates consistently falling between 2.5% and 4.0%, which bodes well for future performance. The anticipated expansion of product assortments, including the introduction of football cleats and the opening of additional shops, is projected to contribute positively to overall sales growth, potentially providing a 100 basis point increase. Furthermore, a stable capital return combined with a projected stabilization and growth in EBITDA suggests a favorable total shareholder return (TSR) outlook as the company positions itself for sustained performance.

The analysis reveals a concerning $15 million EBITDA shortfall, significantly below consensus estimates, attributed to an erosion in profit margins by 140 basis points. Furthermore, the company's full-year guidance suggests a 1% decline in revenues, with an expected 0.3% drop in the second half of the year, reflecting stagnant performance amid macroeconomic uncertainties. Additionally, low comparable sales growth of 0.2% coupled with mid-40s net sales per square foot indicates persistent challenges in achieving desired profitability levels, thereby reinforcing a negative outlook for Academy Sports's stock.