Despite its impressive fundamentals, NASDAQ:ASO remains undervalued.

Last update: Dec 2, 2024

ACADEMY SPORTS & OUTDOORS IN (NASDAQ:ASO) has caught the attention of our stock screener as a great value stock. NASDAQ:ASO excels in profitability, solvency, and liquidity, all while being very reasonably priced. Let's delve into the details.

Exploring NASDAQ:ASO's Valuation

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NASDAQ:ASO scores a 8 out of 10:

Based on the Price/Earnings ratio of 7.35, the valuation of ASO can be described as very cheap.
Based on the Price/Earnings ratio, ASO is valued cheaply inside the industry as 98.36% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 29.78, ASO is valued rather cheaply.
A Price/Forward Earnings ratio of 7.10 indicates a rather cheap valuation of ASO.
94.26% of the companies in the same industry are more expensive than ASO, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.23, ASO is valued rather cheaply.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ASO indicates a rather cheap valuation: ASO is cheaper than 95.08% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, ASO is valued cheaply inside the industry as 90.98% of the companies are valued more expensively.
The excellent profitability rating of ASO may justify a higher PE ratio.

Profitability Analysis for NASDAQ:ASO

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:ASO, the assigned 9 is a significant indicator of profitability:

With an excellent Return On Assets value of 10.00%, ASO belongs to the best of the industry, outperforming 85.25% of the companies in the same industry.
The Return On Equity of ASO (24.95%) is better than 81.15% of its industry peers.
ASO has a better Return On Invested Capital (12.97%) than 82.79% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ASO is significantly above the industry average of 12.06%.
The 3 year average ROIC (17.55%) for ASO is well above the current ROIC(12.97%). The reason for the recent decline needs to be investigated.
ASO has a better Profit Margin (7.98%) than 86.89% of its industry peers.
ASO's Profit Margin has improved in the last couple of years.
ASO's Operating Margin of 10.37% is amongst the best of the industry. ASO outperforms 85.25% of its industry peers.
In the last couple of years the Operating Margin of ASO has grown nicely.
In the last couple of years the Gross Margin of ASO has grown nicely.

Analyzing Health Metrics

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:ASO has earned a 8 out of 10:

ASO has an Altman-Z score of 3.06. This indicates that ASO is financially healthy and has little risk of bankruptcy at the moment.
ASO has a better Altman-Z score (3.06) than 70.49% of its industry peers.
ASO has a debt to FCF ratio of 1.18. This is a very positive value and a sign of high solvency as it would only need 1.18 years to pay back of all of its debts.
The Debt to FCF ratio of ASO (1.18) is better than 80.33% of its industry peers.
ASO has a Debt/Equity ratio of 0.25. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.25, ASO is in the better half of the industry, outperforming 61.48% of the companies in the same industry.
With a decent Current ratio value of 1.66, ASO is doing good in the industry, outperforming 69.67% of the companies in the same industry.
The current and quick ratio evaluation for ASO is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

How We Gauge Growth for NASDAQ:ASO

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:ASO, the assigned 4 reflects its growth potential:

ASO shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 94.62% yearly.
Based on estimates for the next years, ASO will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.51% on average per year.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of ASO

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.