Value
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.6 |
| P/S | 9.6 |
| EV/EBITDA | 4.4 |
| Fwd P/E | 8.2 |
| PEG | 4.9 |
| Analyst target | 4.0 |
- ▸Forward P/E: 14.4x
- ▸PEG: 1.59
DKS · Why this verdict
Why Dick's Sporting Goods (DKS) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
With the share price just below the analyst consensus target, roughly 2% of upside remains against a downside band more than three times as wide, producing a risk/reward ratio of approximately 0.3-to-1 that does not compensate for holding through the next catalyst window. Price targets | Upside to the analyst consensus target expands beyond 15% as either the price corrects or consensus estimates are revised higher, restoring an attractive entry geometry. | →Stable |
| CounterStrong revenue growth and a positive news sentiment environment may prompt analyst target upgrades that widen the upside gap without requiring a price correction, making the current geometry a temporary rather than structural constraint. | ||
With 63% revenue growth year-over-year, the company leads its peer group in top-line expansion, suggesting it is capturing meaningful market share in specialty retail. Growth breakdown | Revenue growth sustains above 30% year-over-year for at least 2 consecutive quarters, confirming that market share gains are durable rather than driven by one-time demand. | →Stable |
| CounterIndustry-leading growth at this rate is typically difficult to sustain; if the expansion reflects temporary category tailwinds rather than structural share capture, deceleration could be sharp and disappoint a market that has already priced in continued outperformance. | ||
Three consecutive quarters of positive earnings surprises were broken by a narrow miss in the most recent period, creating uncertainty about whether the prior streak was a reliable indicator of guidance discipline or has now ended. Earnings | EPS beats consensus in the next 2 consecutive quarters, confirming the most recent miss was an isolated event rather than the start of a trend. | →Stable |
| CounterA three-beat streak with an average surprise of roughly 5% across those quarters demonstrates a management team that has repeatedly delivered above expectations, and a single slight miss at -0.19% is not material enough to signal a structural deterioration in execution. | ||
Free cash flow is negative — converting at roughly -59% relative to net income — meaning the business is consuming rather than generating cash despite reporting positive earnings, which raises questions about earnings quality and the durability of reported profitability. Quality breakdown | Free cash flow turns positive and the conversion ratio rises above 50% of net income for 2 consecutive quarters over the next 12 months. | →Stable |
| CounterNegative free cash flow in a high-growth specialty retailer may reflect elevated capital expenditure tied to expansion, which could normalize as the investment phase matures and generate strong cash in subsequent periods. | ||
Despite the stock trading above its 200-day moving average, volume has been consistently leaving the stock — a pattern of distribution rather than accumulation — and momentum has failed to clear the minimum threshold, signaling that price strength may not be supported by genuine buying interest. Momentum breakdown | On-balance volume turns from declining to rising over 4 consecutive weeks, indicating that accumulation has replaced distribution and underpinning any price advance. | →Stable |
| CounterTrading above the 200-day moving average remains a structurally positive technical signal, and distribution can persist for extended periods in fundamentally improving businesses without presaging a meaningful price decline. | ||
With the share price just below the analyst consensus target, roughly 2% of upside remains against a downside band more than three times as wide, producing a risk/reward ratio of approximately 0.3-to-1 that does not compensate for holding through the next catalyst window.
→StablePrice targets
- Expectation
- Upside to the analyst consensus target expands beyond 15% as either the price corrects or consensus estimates are revised higher, restoring an attractive entry geometry.
CounterStrong revenue growth and a positive news sentiment environment may prompt analyst target upgrades that widen the upside gap without requiring a price correction, making the current geometry a temporary rather than structural constraint.
With 63% revenue growth year-over-year, the company leads its peer group in top-line expansion, suggesting it is capturing meaningful market share in specialty retail.
→StableGrowth breakdown
- Expectation
- Revenue growth sustains above 30% year-over-year for at least 2 consecutive quarters, confirming that market share gains are durable rather than driven by one-time demand.
CounterIndustry-leading growth at this rate is typically difficult to sustain; if the expansion reflects temporary category tailwinds rather than structural share capture, deceleration could be sharp and disappoint a market that has already priced in continued outperformance.
Three consecutive quarters of positive earnings surprises were broken by a narrow miss in the most recent period, creating uncertainty about whether the prior streak was a reliable indicator of guidance discipline or has now ended.
→StableEarnings
- Expectation
- EPS beats consensus in the next 2 consecutive quarters, confirming the most recent miss was an isolated event rather than the start of a trend.
CounterA three-beat streak with an average surprise of roughly 5% across those quarters demonstrates a management team that has repeatedly delivered above expectations, and a single slight miss at -0.19% is not material enough to signal a structural deterioration in execution.
Free cash flow is negative — converting at roughly -59% relative to net income — meaning the business is consuming rather than generating cash despite reporting positive earnings, which raises questions about earnings quality and the durability of reported profitability.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive and the conversion ratio rises above 50% of net income for 2 consecutive quarters over the next 12 months.
CounterNegative free cash flow in a high-growth specialty retailer may reflect elevated capital expenditure tied to expansion, which could normalize as the investment phase matures and generate strong cash in subsequent periods.
Despite the stock trading above its 200-day moving average, volume has been consistently leaving the stock — a pattern of distribution rather than accumulation — and momentum has failed to clear the minimum threshold, signaling that price strength may not be supported by genuine buying interest.
→StableMomentum breakdown
- Expectation
- On-balance volume turns from declining to rising over 4 consecutive weeks, indicating that accumulation has replaced distribution and underpinning any price advance.
CounterTrading above the 200-day moving average remains a structurally positive technical signal, and distribution can persist for extended periods in fundamentally improving businesses without presaging a meaningful price decline.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Three consecutive earnings beats were followed by a miss in the most recent quarter, and while the business is the industry growth leader with 63% revenue growth year-over-year, free cash flow is negative, the stock is just below the analyst consensus target with only about 2% upside remaining, and the risk/reward ratio of 0.3-to-1 tilts firmly unfavorable — a setup that favors patience over new exposure.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 7.0 |
| ROA | 4.9 |
| Gross margin | 2.7 |
| Op margin | 4.2 |
| Net margin | 2.4 |
| Current ratio | 5.5 |
| FCF quality | 0.0 |
| Moat | 6.0 |
| Piotroski F | 8.9 |
- ▸Earnings quality RED FLAG: -59% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
7.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 3.9 |
- ▸Strong growth: 63% YoY
Momentum
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 9.7 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 1.1 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 5.9 |
| erm sentiment | 4.9 |
Insider
3.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Modest insider selling — $5,506,861 (0.026% of mkt cap)
Peer rank
5.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.4 |
| quality rank | 5.3 |
| growth rank | 9.6 |
- ▸Industry growth leader
Technical
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.4 |
| support resistance | 2.4 |
| 52w position | 9.3 |
Risk (lower is worse)
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 2.6 |
| days to cover | 5.2 |
| volatility | 3.1 |
| put call | 10.0 |
| implied vol | 4.8 |
| beta | 6.1 |
| debt equity | 4.2 |
Catalyst
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 5.2 |
| dividend safety | 6.0 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 212.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:5.2>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:53d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.5=NEGATIVE
Warning (1)
- MOMENTUM:5.2<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-0.45
Upside
-4.8%
Downside
10.8%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 64, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.0 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 7.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.5=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.45 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 7.0, Sentiment at 6.3, and Value at 6.0; the weakest are Insider at 3.9, Quality at 4.6, and Technical at 4.7. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.45 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Streak Interrupted
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P2Negative Free Cash Flow
Trip ifFree cash flow remains below $0 for 3 consecutive quarters, confirming structural rather than temporary cash consumption.
- P3Thin Upside Unfavorable Risk Reward
Trip ifUpside to the analyst target expands beyond 15% as consensus estimates are raised above $260 or the stock corrects more than 12%.
- P4Industry Leading Revenue Growth
Trip ifRevenue growth falls below 30% year-over-year for 2 consecutive quarters, signaling a structural deceleration from the current pace.
- P5Volume Distribution Momentum Failure
Trip ifOn-balance volume turns positive (rising) for 4 consecutive weeks while price holds above the 200-day moving average.