Academy Sports and Outdoors (ASO) is expanding again, with three new stores planned this quarter in Altoona, Pennsylvania, as well as North Knoxville and Morristown, Tennessee, following recent store openings and loyalty program investments.

The recent store openings and loyalty investments come after a period where the share price has cooled, with the 90 day share price return down 12.03%, even as the 1 year total shareholder return sits at 31.43%. This suggests earlier gains are now consolidating around the latest US$52.59 close.

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With revenue of US$6.05b, net income of US$376.77m and a value score of 5, plus the stock trading at a discount to both analyst targets and intrinsic estimates, is there a genuine opportunity here or is the market already pricing in future growth?

Most Popular Narrative: 14.4% Undervalued

Academy Sports and Outdoors' most followed valuation narrative places fair value at $61.42 compared with the recent $52.59 close, framing the current store rollout and buybacks in a more generous light than the market.

An ongoing store expansion strategy focused on secondary/tertiary markets with growing populations and suburban migration (20-25 new stores in 2025, robust early comps in new stores) sets up above-peer top-line growth and improved operating leverage as these locations mature.

Curious what kind of revenue path, margin profile, and future earnings multiple are built into that fair value line? The narrative leans on steady growth, improving profitability, and a lower earnings multiple than many peers. The tension sits between those assumptions and what the current price already reflects.

Result: Fair Value of $61.42 (UNDERVALUED)

However, the story could change quickly if higher income customers pull back, or if heavier promotions continue to pressure margins and constrain the earnings path relative to that fair value line.

Next Steps

If this blend of optimism and caution resonates, it could be worth looking through the numbers yourself and stress testing your own thesis. For a quick overview of what the market currently views as key positives, take a look at the 3 key rewards

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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.