Dick’s Sporting Goods (DKS) Pre-earnings Analysis
Chart done on hourly timeframe. Dick’s Sporting Goods has started off 2024 with a near vertical rally, moving the company to a new all time high, and nearly doubling it from its 52 week lows. Because of their niche market position, Dick’s has been able to maintain strong presence in the retail sector unlike many other retailers who have lost to e-commerce. The company revenue is steady for a retailer, and they’ve managed to stay profitable over the years. Their balance sheet is also healthy and free cash flow is reading at a positive number. This explains why investors stepped in when DKS was trading around the $100.00 mark, when its P/E ratio was only 8, now 16. Coming into these earnings, the question is if they can once again meet estimates. Markets are expecting about 30% growth in quarter over quarter profitability, about 3.34 EPS. Coming out of the holiday quarter this might be attainable for the company, but we’ll find out on 14th.
Option chain analysis:
This week’s option chain is currently reflecting an implied volatility reading of about 110%, which translates to about a $18 move on the stock. That set’s DKS up to either move to around 200.00 on good earnings, or below its 165.00 support if they miss. If they stay flat then OTM options to both sides will be crushed.