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Academy Sports and Outdoors, Inc. (ASO) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Academy Sports and Outdoors, Inc. (ASO)

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Intrinsic Value (DCF)

Current$58.13
→
Intrinsic$138.42
+138%
$87.70$138.42$234.65
Market implies 7% growth for 5 years
DCF analysis suggests ASO could have 138% upside at 25% growth — verify assumptions match your view.
At $58, the market prices in only 7% growth — below historical 25%, suggesting low expectations.
Range: Bear $88 → Bull $235. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$175$191$208$225
10%$116$127$138$151
12%$84$92$100$109
14%$63$69$76$83

Bull Case

  • Bull case ($235) offers 304% upside at 30% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (7%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($88) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$410.62M
Year 2$513.27M
Year 3$641.59M
Year 4$801.98M
Year 5$1.00B
Terminal$14.75B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$328.49MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is ASO stock undervalued or overvalued?
🟢 UNDERVALUED

ASO trades at $58.13 vs. our DCF-derived intrinsic value of $111.15, implying +90% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of ASO's future cash flows. The bear case ($65.85) still suggests upside, providing margin of safety.

What is ASO's intrinsic value?

Using a 5-year DCF model: Base FCF of $328M, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $1.50B net debt and dividing by 0.07B shares: Bear $65.85 | Base $111.15 | Bull $177.85. Current price $58.13 implies +90% to base case.

How is ASO's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($9.62B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.