Dick's Sporting Goods (DKS): Zacks Rank Buy

By Michael Vodicka
On 1:00 am EDT, Tuesday October 6, 2009

Dick's Sporting Goods (NYSE: DKS - News) is one of the few companies in the challenging consumer environment that is posting year-over-year revenue growth.

Company Description

Dicks Sporting Goods, Inc. is a sporting goods retailer that sells sporting goods for men, woman and children. The company was founded in 1948 and has a market cap of $2.48 billion.

In spite of the battered economy and weak spending environment, shares of DKS have more than doubled in the last 6 months in response to the company's better than expected second-quarter results, reported on Aug 20.

Second-Quarter Results

Revenue was up 4% from last year to $1.13 billion. The gains were related to new store openings and e-commerce sales. Same-store sales were down 4.1%. EPS came in better than expected at 36 cents per share, 5 cents ahead of the Zacks Consensus Estimate.

Estimates Advance

After the good quarter, estimates jumped higher, with the current year 9 cents and climbing to $1.07 per share. The next-year estimate is pegged at $1.22, a 14% growth projection.

Valuation

Based on the current-year estimate, this stock has a P/E multiple of 20.5X, a premium to the overall market.

The Chart

Shares of DKS have been trending higher since bottoming out just above $10 in early March. More recently, this stock topped off just above $23, take a look below.