Dick’s Sporting Goods (DKS:NYS) Fundamental Valuation Report

Dick’s Sporting Goods (DKS:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Dick’s Sporting Goods(DKS:NYS)

Consumer Cyclical:Specialty Retail

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$76.56 (USD) 03/25/2021

Weighted Valuation
$76.66 (USD)

Overall Rating
Fairly valued to slightly Undervalued by 0.1%

Valuation Models Comparables: $83.40 (USD)
(in order of importance) Adjusted Book Value: $67.59 (USD)
Multiples: $74.61 (USD)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation
According to Analyst consensus at $73.67 this stock is Fairly valued

Company Overview (DKS:NYS USD)

Price 76.56
Range 72.13 – 77.53
52 week 17.78 – 80.58
Open 72.31
Vol / Avg. 2.1M/1.89M
Mkt cap 6.84B
P/E 13.38
Div/yield 1.25/0.02
EPS 5.72
Shares 89.28M
Beta 1.70

Company Description

Dick’s Sporting Goods retails athletic apparel, footwear, and equipment for sports. Dick’s operates about 725 stores under its own name and another 125 specialty stores under Golf Galaxy and Field & Stream names. Dick’s also operates e-commerce sites including youth sports site Team Sports HQ. Dick’s carries private-label merchandise and national brands such as Nike, The North Face, Under Armour, Callaway Golf, and TaylorMade. Based in the Pittsburgh area, Dick’s was founded in 1948 by the father of current chairman, CEO, and controlling shareholder Edward Stack.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for DKS:NYS

Using a discounted cash flow model we generated an intrinsic value of $129.08 (USD) for DKS:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

DKS:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $129.08 1% 5% 1% 5%
WACC (or Ke) 9.93 $150.87 $112.78
Terminal Growth Rate 3.00 $114.99 $147.91
Tax Rate 0.26 $135.90 $122.26
Cash Flow 909,490,000 $124.00 $134.16
Capital Expenditures 0 $129.08 $129.08
Long Term Debt 157,625,000 $129.17 $128.99

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $83.40 (USD) for DKS:NYS. We also generated a valuation of $146.03 (USD) using other metrics and comparables.
The comparable companies were Stitch Fix (SFIX:NAS), National Vision Holdings (EYE:NAS), At Home Group (HOME:NYS), Michaels Companies (MIK:NAS) and Murphy USA (MUSA:NYS).

Company DKS:NYS End Date Value
Earnings/Share $5.72 (USD)
Book Value/Share $26.20 (USD)
Sales/Share $103.46 (USD)
Cash Flow/Share $16.76 (USD)
EBITDA/Share $11.73 (USD)
Price Based on Comps Adjustment Factor (%)
$231.52 (USD) -47.1
$159.12 (USD) -58.7
$141.74 (USD) -63.0
$90.84 (USD) -32.6
$155.53 (USD) -24.2
DKS:NYS Ratios Used Average Values SFIX:NAS EYE:NAS HOME:NYS MIK:NAS MUSA:NYS
13.38 PE Ratio 40.48 0.00 99.27 0.00 11.09 11.07
2.92 PB Ratio 6.07 11.66 3.92 3.68 0.00 5.03
0.74 PS Ratio 1.37 2.73 2.11 1.01 0.62 0.38
4.57 PCF Ratio 101.84 479.42 15.39 4.15 2.67 7.58
7.66 EV to EBITDA 13.26 0.00 23.64 0.00 9.51 6.63

Multiples

Using a multiples approach we generated a valuation of  $74.61 (USD) for DKS:NYS

Company DKS:NYS End Date Value
Earnings/Share $5.72 (USD)
Book Value/Share $26.20 (USD)
Sales/Share $103.46 (USD)
Cash Flow/Share $16.76 (USD)
EBITDA/Share $11.73 (USD)
Price Based on Comps Adjustment Factor
$79.03 (USD) 0
$56.09 (USD) 0
$48.05 (USD) 0
$100.56 (USD) 0
$89.30 (USD) 0
Ratios Ratio Average
PE Ratio 13.82
PB Ratio 2.14
PS Ratio 0.46
PCF Ratio 6.00
EV to EBITDA 7.61

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  DKS:NYS for the last 10 years was  2.45

We ran the Adjusted Book Value for  DKS:NYS and generated a book value of  $27.55 (USD)
By multiplying these we get an adjusted valuation of  $67.59 (USD)

Analyst Data

In the Stockcalc database there are 3 analysts that provide a valuation for DKS:NYS. The 3 analysts have a concensus valuation for DKS:NYS for 2022 of $73.67 (USD).

DKS:NYS Dick’s Sporting Goods

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 4 0 3.1667 Hold 2021-3-24

Current Price: 76.56 USD

Analyst Consensus
USD Millions 2022 2023 2024
Mean EPS 4.80 5.20 4.87
# EPS Analysts 6 5 2
Mean Revenue 9,625.10 9,887.50 9,816.70
# Revenue Analysts 5 4 2
Mean Target Price 73.67
Mean Cash Flow 8.46 7.70 9.69
Mean EBITDA 923.60 961.30 883.00
Mean Net Income 436.70 452.40 409.40
Mean Debt Outstanding -560.10 -408.80 -219.10
Mean Tax Rate 23.10 24.00 25.00
Mean Growth Rate 6.15
Mean Capital Expenditure 326.60 296.60 324.50

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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