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Can Academy Sports and Outdoors, Inc. (ASO) Run Higher on Rising Earnings Estimates?

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Academy Sports and Outdoors, Inc. (ASO) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.

The upward trend in estimate revisions for this company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For Academy Sports and Outdoors, Inc. There has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.

Current-Quarter Estimate Revisions

The earnings estimate of $1.40 per share for the current quarter represents a change of -25.93% from the number reported a year ago.

The Zacks Consensus Estimate for Academy Sports and Outdoors, Inc. has increased 8.95% over the last 30 days, as one estimate has gone higher while one has gone lower.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $6.85 per share, representing a year-over-year change of -9.87%.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, four estimates have moved up for Academy Sports and Outdoors, Inc. versus no negative revisions. This has pushed the consensus estimate 11.78% higher.

Favorable Zacks Rank

Thanks to promising estimate revisions, Academy Sports and Outdoors, Inc. currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Academy Sports and Outdoors, Inc. shares have added 20.9% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.


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