Can This Sporting Goods Stock Deliver Grand Slam Profits?

ASO sports a whopping 213.1% year-over-year lead

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The shares of Academy Sports and Outdoors, Inc. (NASDAQ:ASO) are up 1.5% at $40.78 at last check, though a reason for today's price action was not immediately clear. While the equity has been cooling down from a Sept. 15, all-time high of $47.65 over the last few weeks, the stock has been in rally mode since going public in October 2020 with an initial public offering (IPO) price of $13, save for a brief pullback period in July and August. Year-over-year, ASO sports a whopping 213.1% lead. 

Despite its impressive chart performance, short sellers have been piling on the security. Short interest jumped 13.5% over the most recent reporting period, and the 10.97 million shares sold short make up a significant 13.3% of the stock's available float, or nearly one week's worth of pent-up buying power. Should some of that pessimism begin to unwind, ASO could surge even higher. 

Now looks like a great time to weigh in on Academy Sports and Outdoors stock's next move with options. The security's Schaeffer's Volatility Index (SVI) of 52% sits higher than only 3% of readings from the past year. In simpler terms, the options market is pricing in low volatility expectations for the equity right now. 

From a fundamental point of view, the security boasts an impressive valuation. ASO is  now trading at price-earnings ratio of 7.24, and has a forward price-earnings ratio of 7.11.

Moreover, the company has maintained solid top- and bottom-line growth, increasing revenues and net income 30% and 787%, respectively, since 2018. On the other hand, the sporting goods name does not carry the strongest balance sheet, with $554 million in cash, as opposed to roughly $2 billion in total debt. Nonetheless, ASO remains a great long-term investment opportunity.

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