Shares of DICK’S Sporting Goods Inc. DKS have been gaining traction on the back of the company’s continuous growth initiatives, solid financial status and impressive fourth-quarter fiscal 2014 results.
Driven by these factors, the company hit a 52-week high of $57.86 yesterday. However, the Zacks Rank #3 (Hold) stock eventually closed at $57.76, up 1.9% year over year.
DICK’S Sporting’s growth prospects appear promising as its strategic measures of consolidating store base and using technology to provide better services, ensure healthy a relationship with existing customers while attracting new ones.
Further, the company has been gaining momentum from the successful expansion of its omni-channel network and powerful marketing and merchandising strategies. All these factors helped the company to deliver spectacular fourth-quarter fiscal 2014 results. Shares of the company have gained 3.4% since the earnings announcement.
The company’s consolidated earnings of $1.30 per share for the reported quarter not only surpassed management’s earlier projection of $1.18–$1.28 and the Zacks Consensus Estimate of $1.22, but also increased 17.1% year over year. On an average, the company has beaten the Zacks Consensus Estimate by 1.6% in the past four quarters, including three positive earnings surprises.
Moreover, total sales grew 10.9% to $2,160 million in the fourth quarter, surpassing the Zacks Consensus Estimate of $2,115 million. The company’s strong quarterly performance encouraged management to issue a favorable guidance for the first quarter and fiscal 2015.
Alongside, the company enjoys a healthy financial status as is evident from its constant share repurchases and recent dividend hike announcement. These not only highlight the company’s stable cash position, but also underscore its focus on boosting shareholder value. This, in turn, bolsters investors’ confidence in the stock.
Together, all the aforementioned factors speak positively about DICK’S Sporting and highlight its solid growth prospects.
Additionally, the company is currently trading at a forward P/E of 18.3x, a 10.8% discount to the peer group average of 20.51x. The company’s last traded price is also roughly 1% less than the Zacks Consensus average analyst price target of $58.36. Both these factors leave room for upside potential, instilling confidence among investors.
Apart from DICK’S Sporting, Dillard's Inc. DDS, Best Buy Co., Inc. BBY and Target Corp. TGT, also hit 52-week highs of $134.91, $42.00 and $81.35, respectively, on Mar 17, 2015.
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