Not all IPOs soar to big gains right out of the gate — or ever. But Academy Sports & Outdoors did. ASO stock rose for nine straight months from its October 2020 IPO to a 242% gain before pulling back.
And the sporting goods and apparel retailer now has its eyes set on new run as it lands a spot on the IBD Breakout Stocks Index.
Starting life as a tire store way back in 1938, Academy Sports has evolved into one of the nation's largest sporting goods and outdoor stores. With over 268 stores and counting, the retailer offers a broad assortment of hunting, fishing and camping equipment and gear, along with sports and leisure products, footwear, apparel and more.
The Texas-based company has opened nine new stores in 2022, including new locations in Florida and West Virginia, as well as Houston just this month.
Academy Sports plans to continue its expansion efforts beyond 2022, with the goal of opening 80 to 100 new stores over the next five years.
Who Joins ASO On The IBD Breakout Stocks Index?
Academy Sports Vs. Dick's Sporting Goods
Rival Dick's Sporting Goods just reported Q3 earnings, topping analyst estimates with a smaller-than-expected decline. After posting two quarters of 7% and 5% declines in earnings, the company posted an 8% sales increase in its latest report.
DKS stock soared on the news in huge volume, retaking its 50-day moving average.
Academy Sports, which is scheduled to report fiscal Q3 numbers on Dec. 7 before the open, has seen slowing but improving top- and bottom-line numbers the last two quarters.
Analysts see Academy Sports posting a 5% decrease in earnings for the current fiscal year, but making a 6% increase next year.
With a Composite Rating of 92, ASO stock tops Dick's score of 90. Both companies earn a "B" SMR Rating, which tracks sales growth, profit margins and return on equity. The two retailers hail from the leisure products industry group, which ranks a solid 27th among the 197 groups IBD tracks.
Dick's Sporting Good holds the edge in terms of market capitalization, with a $9.3 billion market cap compared to Academy Sports' $4.1 billion.
On the institutional demand front, 33 funds with an "A+" rating from IBD have reported owning ASO stock. Twenty-four such funds own shares in DKS stock. Fidelity Contrafund has a position in both retailers. The famed mutual funds owns 4.8% of ASO shares vs. its 2.9% ownership of Dick's Sporting Goods.
ASO Stock Warms Up For New Breakout
Academy Sports continues to work on a cup pattern showing a 55.61 buy point. It's a first-stage base — which generally entails less risk — since ASO stock undercut the low in its prior consolidation to reset the base count.
As DKS stock did after reporting earnings, Academy Sports has reclaimed its 10-week line. Showing market leadership, the relative strength line for ASO stock has hit a new high ahead of its potential breakout.
Look for volume in Academy Sports & Outdoors to come in at least 40% above average on any breakout move to confirm demand.
Ahead of the Thanksgiving break, ASO stock is poking at the new entry in volume trending slightly above average.
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Follow Matthew Galgani on Twitter at @IBD_MGalgani.
