NEW YORK (TheStreet) -- The market for athletic apparel has been strong, as Nike (NKE) - Get Report and Under Armour (UA) - Get Reporthave shown. Will that strength carry over to strong earnings for specialty retailer Finish Line (FINL) when it reports Friday?

Finish Line generates a quarter of the sales enjoyed by competitor Foot Locker (FL) - Get Report. However, the company is trying to become more profitable by cutting capital expenses and closing poor-performing stores. This will help it operate with less overhead and be more efficient. The end result will be widening margins and higher profits.

At just 13 times earnings, these shares are cheap. They have an average analysts price target of $26, which translates to 13% gains from current levels of around $23.60 per share. So ahead of the company's fourth-quarter and full-year results there are plenty of catalysts to send these shares higher.

And if you like buying bargains, the shares are down about 3% for the year to date and 14% for the past 52 weeks. Investors looking for an undervalued name in retail can do well here.

The Indianapolis company sells a variety of sports gear but sales growth has been hard to come by. Its sales have climbed from around $1.2 billion in 2005 to $1.67 billion as of full-year 2014. While that translates to 40% growth in total, it averages out to just 4% sales growth annually. 

What about the future? Last week, Paul Trussell, analyst at Deutsche Bank reiterated his buy rating on the stock. Although he lowered his price target by $1 to $29 per share, it still calls for gains of more than 25%.

"At current levels, FINL is the least expensive stock in our universe at 11.2x our FY16 EPS estimate," he said in a note to investors. "While poor execution and market share loss may continue to pressure the company, and we have muted expectations for [the fourth quarter], we believe that FY15 will benefit from declining operating expenses and capex as well as an increase in share buybacks to help bolster shareholder returns."

For the just-ended quarter, revenue estimates stand at $550 million, according toYahoo! Finance. Ffor the full year, Finish Line is expected to deliver sales of $1.83 billion. Assuming it meets both estimates, revenue would have climbed 6% year over year for the quarter and climbed 9% year over year for all of 2015. The latter would indicate that in 2015 Finish Line has doubled the revenue growth rate that it has averaged in the past decade.

While fourth-quarter projected earnings of 86 cents per share implies a decline from last year's earnings of 87 cents per share for the comparable quarter, full-year 2016 earnings of $1.82 per share calls for a 9% jump above full-year 2015 estimates of $1.66 per share. 

This means in 2016, Finish Line is expected to grow earnings per share by three percentage points higher than revenue, which is projected to reach $1.93 billion. To achieve this, the company will need to either grow its profit margins through its ongoing cost-cutting initiatives or reduce its share count by buying back stock. Deutsche Bank sees a scenario where both of these events can occur.