8. DICK’S Sporting Goods Inc. (NYSE:DKS)
Average Upside Potential: 16.26%
Forward Price-to-Earnings Ratio: 14.75
Number of Hedge Fund Holders: 34
DICK’S Sporting Goods Inc. (NYSE:DKS) is the largest sporting goods retailer in the US, offering a variety of athletic equipment, apparel, and footwear for a variety of sports and activities. It is known for its extensive selection, competitive pricing, and excellent customer service. The company has 4 subsidiaries: Golf Galaxy, Public Lands, House of Sport, and Going Going Gone.
Sales during FQ2 2025 totaled $3.47 billion, growing 7.75% compared to the year-ago period. Comparable sales increased 4.5%, driven by growth in average tickets and transactions. Gross profit for the quarter was at $1.28 billion, representing 36.7% of net sales. These results were led by footwear and athletic apparel. The company saw more athletes purchase from their stores and digitally, and spend more than they did last year. A huge reason behind this was its Omnichannel athlete experience, which created a seamless buying experience for all customers.
The company is now investing heavily in both online and in-store experiences to make shopping easier and more engaging. This is being achieved through House of Sport and Field House, two innovative store concepts that offer a unique shopping experience with interactive features and strong partnerships with brands and communities.
DICK’S Sporting Goods Inc. (NYSE:DKS) focuses on offering trendy and differentiated products to maintain its position as a go-to destination for sports equipment. Additionally, it’s creating a positive work environment to attract and retain top talent and is investing in brand building through partnerships like Team USA and LA28. The company is confident in its strategies for continued growth, which positions it for long-term success.
Emeth Value Capital made the following comment about DICK’S Sporting Goods, Inc. (NYSE:DKS) in its Q2 2023 investor letter:
“For as often as the phrase “a private equity approach to public markets” is repeated, it is surprising to observe the great divide that exists between even very sophisticated long-term investors in public and private markets. There is perhaps no more well-trodden battleground than that of valuation marks. Public investors, particularly in times of market stress, are quick to express frustration that private equity portfolios are not marked to market. The title of Cliff Asness’ recent opinion piece in Institutional Investor captures the sentiment well, “Why Does Private Equity Get to Play Make-Believe With Prices?”. The level of discontent is surprising for two reasons: first, the difference in methodology is quite easily understood, and second, contrary to public markets gospel, it is evident that liquidity and the discovery of value are in no way synonymous. Indeed, they may be opposing forces more often than not. At the risk of oversimplifying, one can think of private equity marks as single-variable valuations, while public equity marks are dual-variable valuations. Both incorporate the level of earnings in a business, but while multiples are held relatively constant in private equity marks, public market marks also incorporate sentiment in the form of a changing multiple. The problem is that Mr. Market tends to change his opinion quite often. Consider the case of one of our former portfolio companies, DICK’S Sporting Goods, Inc. (NYSE:DKS)…” (Click here to read the full text)
