Dick'S Sporting Goods, Inc. (NYSE: DKS)

Sector: Consumer Cyclical Industry: Specialty Retail CIK: 0001089063
Market Cap 24.98 Bn
P/B 15.65
P/E 88.10
P/S 4.64
ROIC (Qtr) 8.83
Div Yield % 0.89
Rev 1y % (Qtr) 36.33
Total Debt (Qtr) 7.70 Bn
Debt/Equity (Qtr) 1.39
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About

Investment thesis

Bull case

  • Operating cash flow of 1.12B provides exceptional 18.87x coverage of interest expenses 59.28M, showing strong debt service capability.
  • Tangible assets of 15.93B provide exceptional 35.18x coverage of deferred revenue 452.86M, showing strong service capability backing.
  • Cash reserves of 821.33M provide ample 3.19x coverage of acquisition spending 257.10M, enabling strategic growth opportunities.
  • Operating cash flow of 1.12B fully covers other non-current liabilities 73.12M by 15.30x, showing strong long-term stability.
  • Robust tangible asset base of 15.93B provides 5.96x coverage of working capital 2.67B, indicating strong operational backing.

Bear case

  • Operating cash flow of 1.12B barely covers its investment activities of (900.60M), with a coverage ratio of -1.24, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 821.33M against inventory of 5.64B, the 0.15 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 1.12B provides thin coverage of dividend payments of (394.16M) with a -2.84 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 88.51M provides weak coverage of capital expenditures of 1.03B, with a 0.09 ratio suggesting additional external financing needs for growth initiatives.
  • Free cash flow of 88.51M represents just -45.60x of debt issuance (1.94M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Specialty Retail
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ULTA Ulta Beauty, Inc. 32.20 Bn 27.06 2.69 2.57 Bn
2 WSM Williams Sonoma Inc 29.62 Bn 25.19 3.40 1.47 Bn
3 TSCO Tractor Supply Co /De/ 28.42 Bn 25.23 1.93 5.72 Bn
4 DKS Dick'S Sporting Goods, Inc. 24.98 Bn 88.10 4.64 7.70 Bn
5 CASY Caseys General Stores Inc 24.65 Bn 59.49 1.65 2.92 Bn
6 BBY Best Buy Co Inc 17.85 Bn 11.66 0.41 4.09 Bn
7 MUSA Murphy USA Inc. 15.91 Bn 61.33 1.35 2.75 Bn
8 FIVE Five Below, Inc 11.68 Bn 37.94 2.64 2.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.40 2.23
EV to Cash from Ops. EV/CFO 59.96 14.70
EV to Debt EV to Debt 3.17 79.39
EV to EBIT EV/EBIT 51.07 -40.16
EV to EBITDA EV/EBITDA 42.08 11.51
EV to Free Cash Flow [EV/FCF] EV/FCF 124.13 -286.14
EV to Market Cap EV to Market Cap 0.98 6.33
EV to Revenue EV/Rev 4.54 2.39
Price to Book Value [P/B] P/B 15.65 32.78
Price to Earnings [P/E] P/E 88.10 -36.32
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.59 -4.05
Dividend Payout Ratio % Div Payout % (Qtr) 37.10 14.19
Dividend per Basic Share Div per Share (Qtr) 4.74 0.71
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 455.67 18.58
Interest Coverage Int. cover (Qtr) 23.93 4.43
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -38.58 13.87
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -43.69 33.75
Dividend Growth (1y) % Div 1y % (Qtr) 10.21 0.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -11.48 -272.99
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -7.05 588.45
EBIT Growth (1y) % EBIT 1y % (Qtr) -9.74 29.27
EBT Growth (1y) % EBT 1y % (Qtr) -10.41 -92.23
EPS Growth (1y) % EPS 1y % (Qtr) -11.57 -121.86
FCF Growth (1y) % FCF 1y % (Qtr) -87.35 71.80
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 9.58 2.50
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.85 1.24
Cash Payout Ratio Cash Payout (Qtr) 0.18 0.04
Cash Ratio Cash Ratio (Qtr) 0.18 0.74
Current Ratio Curr Ratio (Qtr) 1.57 3.56
Debt to Equity Ratio Debt/Equity (Qtr) 1.39 25.92
Interest Cover Ratio Int Coverage (Qtr) 23.93 4.43
Times Interest Earned Times Interest Earned (Qtr) 23.93 4.43
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 12.50 -42.64
EBIT Margin % EBIT Margin % (Qtr) 9.53 -131.12
EBT Margin % EBT Margin % (Qtr) 9.13 -64.70
Gross Margin % Gross Margin % (Qtr) 35.30 30.93
Net Profit Margin % Net Margin % (Qtr) 6.90 -65.71