This is turning into a record-setting year for Dick's Sporting Goods (NYSE:DKS) as the retailer benefits from consumers increasingly turning to outdoor activities during the coronavirus pandemic.

The sporting goods store said comparable store sales growth hit another milestone in the third quarter, jumping over 23%, which followed a near 21% rise in the second. But that growth was the result of people pursuing sporting activities in warm weather, and now we're heading into the cold weather months.

As Dick's stock has quadrupled from its March low point, let's see whether investors should wait for a better price, or should they consider the sporting goods store a buy?

Baseball batter, catcher, and umpire during a night game.

Image source: Getty Images.

Let it snow

Trying to time an investment is never a very good strategy, and waiting for Dick's Sporting Goods stock to drop because of winter's onset doesn't sound like a promising one either. Although outdoor activities certainly helped push sales higher, there was an equal amount of indoor activity as well. The home-fitness trend took off this year with sales of exercise equipment soaring to new heights.

Peloton Interactive (NASDAQ:PTON) saw record sales of its upscale treadmills and stationary bikes, while Nautilus (NYSE:NLS) benefited from targeting consumers of more modest means. Dick's was able to piggyback on the trend through sales of its athleisure apparel and footwear, such as its premium private label CALIA brand, which CEO Ed Stack said had become the second-biggest women's brand in the company in five years after its launch. The discount DSG brand, which spans men's and women's apparel as well as hardlines like sporting equipment, is already its largest vertical brand one year after being introduced.

Moreover, Dick's says it actually generates significant operating cash in the fourth quarter because of holiday sales, and sales of cold weather sporting goods and apparel.

Stack told analysts, "[W]e hope it gets cold."

All year 'round

Dick's created controversy when it began distancing itself from firearms and the hunting industry. While it damaged its business for over a year from the backlash as gun owners and hunters took their business elsewhere, the sporting goods store began substituting products that could turn the company into a year-round retailer.

It took some time, but that merchandise helped lift Dick's out of the sales slump it was in and did so with higher profits since it carried margins greater than firearms did. The switch actually helped the retailer this year as many of the products it introduced proved popular with consumers during the pandemic and have probably advanced Dick's goal of becoming a four-season sporting goods company.

Even though it should have been hurt by the closure of retail stores early in the year, it was able to utilize its digital platform to keep sales growing. Once stores reopened, business snapped back relatively quickly.

Data from location analytics firm, which analyzes foot-traffic patterns at retailers, found customer visits to Dick's store in October were down just 5.7%, indicating its in-store business is coming back strong at just the right time. noted, "Should Dick's prove capable of maintaining its larger basket sizes amid this visit improvement, the impact could be huge."

Homerun swing

Despite the big gains Dick's Sporting Goods has made, its stock is still steeply discounted. The retailer trades at just 13 times trailing earnings and 10 times this year's estimates, and goes for just a fraction of its sales.

While trading at a ridiculously low three times the free cash flow it produces, even as analysts forecast the sporting goods retailer can grow earnings at 13% annually for the next five years, it points to Dick's Sporting Goods being a buy.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.