Small-Cap Stock Academy Sports Poised For A Comeback In 2025

The Texas-based retailer that specializes in sports equipment and outdoor gear struggled over the last year amid declining same-store sales and concerns that it had grown too quickly.

In 2024, ASO stock declined 12%, underperforming the benchmark S&P 500 index that rose 23% amid an ongoing bull market.

However, many analysts say that Academy Sports & Outdoors’ stock could rebound in the year ahead, fueled by a return to sales and earnings growth.

The company and its stock were recently profiled and recommended by Barron’s.

The good news for investors is that the stock is not only affordable at current levels but is also cheap.

Following last year’s selloff, Academy Sports & Outdoors’ stock currently trades at just nine times future earnings estimates, less than half the average price-to-earnings (P/E) ratio among companies listed in the S&P 500 index.

The stock also pays a dividend of $0.11 U.S. per share each quarter, giving it a yield of 0.75%. With a market capitalization of only $4 billion U.S., Academy Sports is a small-cap stock.

The company has been a going concern for 87 years.

Originally a family-owned business, Academy Sports & Outdoors was acquired by private equity specialists Kohlberg Kravis Roberts (KKR) in 2011.

KKR took Academy Sports public in October 2020 on the Nasdaq exchange. Even with last year’s pullback, the stock is still up 353% since its market debut less than five years ago.

Today, Academy Sports & Outdoors has 275 locations, mostly spread across the southeastern U.S., and 22,000 employees.

Think of the company as a smaller, regional version of %DicksSportingGoods (NYSE: $DKS), only with a much cheaper valuation.

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