Last week, you might have seen that Academy Sports and Outdoors, Inc. (NASDAQ:ASO) released its full-year result to the market. The early response was not positive, with shares down 9.9% to US$64.11 in the past week. It was a credible result overall, with revenues of US$6.2b and statutory earnings per share of US$6.70 both in line with analyst estimates, showing that Academy Sports and Outdoors is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Academy Sports and Outdoors after the latest results.
Taking into account the latest results, Academy Sports and Outdoors' 18 analysts currently expect revenues in 2025 to be US$6.26b, approximately in line with the last 12 months. Statutory earnings per share are forecast to dip 4.1% to US$6.69 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$6.38b and earnings per share (EPS) of US$7.27 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$77.00, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Academy Sports and Outdoors analyst has a price target of US$85.00 per share, while the most pessimistic values it at US$65.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Academy Sports and Outdoors is an easy business to forecast or the the analysts are all using similar assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Academy Sports and Outdoors' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.6% growth on an annualised basis. This is compared to a historical growth rate of 5.9% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Academy Sports and Outdoors is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Academy Sports and Outdoors. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$77.00, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Academy Sports and Outdoors going out to 2027, and you can see them free on our platform here.
It might also be worth considering whether Academy Sports and Outdoors' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.