Shares of Cabela's
How it got here
Who says the consumer isn't alive and well? Consumers who want to hunt, fish, and camp are certainly doing well, pushing Cabela's to a new high.
The company saw a strong improvement in financials in the most recent quarter. Revenue was up 11.6% to $627.3 million and same-store sales were up 4.7%. Increased margins helped push profits higher as well, with earnings per share up 52% to $0.47. This blew Wall Street's expectations out of the water.
This isn't the only sporting goods retailer moving higher, either. Dick's Sporting Goods
Revenue growth has been strong across the board for sporting goods companies, but Cabela's is leading this group. It also has the lowest forward P/E ratio, so upside potential is there.
|
Company |
Price/Book |
Quarterly Revenue Growth |
Profit Margin |
Forward P/E |
|---|---|---|---|---|
| Cabela's | 3.1 | 11.6% | 5.7% | 17.1 |
| Dick's Sporting Goods | 3.9 | 10% | 4.8% | 17.9 |
| Hibbett Sports | 7.0 | 8% | 8.5% | 19.4 |
Source: Yahoo! Finance.
The big questions is: Will these trends continue?
What's next?
The top end of the consumer market is very healthy, but the bottom end isn't, which will keep a cap on Cabela's upside. I also think that expecting double-digit growth over the long term is expecting a lot from a company -- and industry -- that already has a wide footprint. I would be cautiously optimistic about Cabela's future and more inclined to buy on a dip when I could get better value.
The CAPS community is even more bullish, giving the company a four-star rating, and with 264 out of 268 All-Stars rating the stock to outperform.
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