Over the past six months, Dick’s stock price fell to $211.88. Shareholders have lost 12.1% of their capital, which is disappointing considering the S&P 500 has climbed by 5.4%. This might have investors contemplating their next move.
Following the pullback, is this a buying opportunity for DKS? Find out in our full research report, it’s free.
Why Does DKS Stock Spark Debate?
Started as a hunting supply store, Dick’s Sporting Goods (NYSE:DKS) is a retailer that sells merchandise for traditional sports as well as for fitness and outdoor activities.
Two Things to Like:
1. Surging Same-Store Sales Show Increasing Demand
Same-store sales is a key performance indicator used to measure organic growth at brick-and-mortar shops for at least a year.
Dick’s demand has been spectacular for a retailer over the last two years. On average, the company has increased its same-store sales by an impressive 4% per year.
2. Stellar ROIC Showcases Lucrative Growth Opportunities
Growth gives us insight into a company’s long-term potential, but how capital-efficient was that growth? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).
Dick’s five-year average ROIC was 24.5%, beating other consumer retail companies by a wide margin. This illustrates its management team’s ability to invest in attractive growth opportunities and produce tangible results for shareholders.
One Reason to be Careful:
Long-Term Revenue Growth Disappoints
A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Regrettably, Dick’s sales grew at a mediocre 8.3% compounded annual growth rate over the last six years. This wasn’t a great result compared to the rest of the consumer retail sector, but there are still things to like about Dick's. 
Final Judgment
Dick’s positive characteristics outweigh the negatives. With the recent decline, the stock trades at 14.5× forward P/E (or $211.88 per share). Is now a good time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More Than Dick's
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